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Leadership rotations and the convergence of subnational economic policies in China: evidence from provincial government work reports

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  • Jiaxuan Lu
Abstract
This article examines how China’s subnational leadership rotations have affected local governments’ policy choices. Utilizing the annual government work reports that outline provincial policy priorities, I find that shuffled leaders choose similar economic policies across different provinces, and this translates into similarities in several policy outcomes. I then show that such policy isomorphism has been driven mainly by convergence in which topics these reports cover, rather than by convergence in how the provincial leaders discuss a given policy issue. However, according to the event study estimates, this economic policy similarity may disappear soon after the shuffled leader leaves office, thus implying that the policy convergence might be transitory. One plausible explanation for these findings is that leadership rotations often indicate that the central government favors the policies implemented by these shuffled leaders, so they tend to replicate some of these policies after moving to the destination province. (JEL H11, H70)

Suggested Citation

  • Jiaxuan Lu, 2024. "Leadership rotations and the convergence of subnational economic policies in China: evidence from provincial government work reports," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 40(2), pages 528-569.
    • Handle: RePEc:oup:jleorg:v:40:y:2024:i:2:p:528-569.
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    File URL: http://hdl.handle.net/10.1093/jleo/ewac026
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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