Power Struggle and Government Oversizing: Unintended Consequences of Checks-and-balance in a One-party Regime
Abstract: One of the central themes in political economy is how power struggle among ruling elites shapes policy outcomes. This paper argues that under weak legal systems, the need to preserve power balance within local leadership might cause inefficient targeted redistribution towards bureaucratic interest groups, consequently government oversizing, and use this to explain the rapid growing government size in China despite the repeated streamlining programmes initiated by the central government. We empirically examine the relationship between the power structure within provincial leadership and the size of senior cadres during 1992—2011. The results show that weaker secretaries are associated with the increasing senior cadres. However, the secretary’s exogenous political status significantly mitigates this influence. Furthermore, we suggest that after 2002 the accelerated turnover probability among secretaries leads to the increasingly weaker secretaries as well as the expansion of senior positions, indicating a declining control of center over local elites. These results are robust against a variety of specifications and estimation strategies. To account for these, we develop a simple bargaining model to study the logrolling within the SC. We also rule out alternative explanation of our empirical results, and discuss the impact of information and career concerns of secretaries on government oversizing.
