Economic Performance, Land Expropriation and Bureaucrat Promotion in China

Abstract: We assess the effectiveness of using career incentives to motivate bureaucrat performance. We collect data on the career history of all Chinese Communist Party (CCP) secretaries, who were in power in any of China’s 334 prefectures between 1996 and 2014. We identify the causal effect of career incentives on performance by exploiting variation in the competitiveness of promotions. We find that increased promotion likelihood causes bureaucrats to adopt a strategy that relies on real estate investment and rural land expropriation, resulting in faster growth in construction employment, higher secondary sector GDP growth; but also suggestive evidence that they lower investment in education and health. We corroborate our findings using survey and remote sensing data, and present evidence that expropriations are positively correlated with adverse individual outcomes, with arrests of local officials, and with the emergence of "ghost cities".