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Policy Choice and Economic Growth under Factional Politics:Evidence from a Chinese Province

Li, D.Z.; Zhang, Q.

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Authors

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Daniel Li daniel.li@durham.ac.uk
Associate Professor

Q. Zhang



Abstract

This paper investigates how political elites make policy choices that have bearing on an authoritarian regime's economy, from the perspective of factional politics. A local leader makes policies primarily to secure his political survival, which is contingent on the support from either his higher-level patrons or his local grassroots constituents. Using a simple model, we show that a local politician with close factional ties to high-level patrons will invest more in sending loyalty signals to the latter to receive their protections, while a poorly-connected politician will make more effort to spur a broad-based economic growth that economically benefits his local constituents. Using a unique county level data on the factional politics of Zhejiang Province, China, we find that counties with weaker (closer) factional ties have lower (higher) tax burdens per capita, while spending more (less) on local public goods provision. The results are stable after various robustness tests.

Citation

Li, D., & Zhang, Q. (2018). Policy Choice and Economic Growth under Factional Politics:Evidence from a Chinese Province. China Economic Review, 47, 12-26. https://doi.org/10.1016/j.chieco.2017.11.003

Journal Article Type Article
Acceptance Date Nov 10, 2017
Online Publication Date Nov 13, 2017
Publication Date Feb 1, 2018
Deposit Date Nov 13, 2017
Publicly Available Date Mar 29, 2024
Journal China Economic Review
Print ISSN 1043-951X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 47
Pages 12-26
DOI https://doi.org/10.1016/j.chieco.2017.11.003
Public URL https://durham-repository.worktribe.com/output/1343832

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