The Annals of Regional Science

, Volume 58, Issue 3, pp 597–622 | Cite as

Political tournament and regional cooperation in China: a game theory approach

  • Yu Chen
  • Anthony G. O. YehEmail author
  • Yingxuan Zhang
Original Paper


This paper aims to study the political incentives of government officials to cooperate with one another to achieve a common goal through game theory. Game theory is often used to analyze and explain regional cooperation by regarding it as a type of institutional collective action in which the actions of its participants (local governments or nations) greatly depend on those of the other participants. However, considering China’s political structure, the political relationship among local government key officials may also influence regional cooperation. This study used the Pan-Pearl River Delta (Pan-PRD) Cooperation, the largest regional cooperation bloc in China formed in 2004. The Pan-PRD covered nine provinces in Mainland China and two special administrative regions as a case study for this research; three models were constructed using game theory to analyze the political incentives of the provincial officials in cooperating with one another under the assumption of relative gains. Results showed that the cooperation incentives are sensitive to the variations of political rankings among the leading provincial officials. Driven by promotion incentives, cooperation is more feasible between jurisdictions with different political rankings and less feasible between jurisdictions with the same political rankings.

JEL Classification

R580 H770 



Funding was provided by National Natural Science Foundation of China (CN) (Grant No. 51408368).


  1. Batabyal AA (1996) Game models of environmental policy in an open economy. Ann Reg Sci 30(2):185–200CrossRefGoogle Scholar
  2. Batabyal AA (1998) Games governments play: an analysis of national environmental policy in an open economy. Ann Reg Sci 32(2):237–251CrossRefGoogle Scholar
  3. Besley T, Case A (1995) Incumbent behavior: vote-seeking, tax-setting, and yardstick competition. Am Econ Rev 85(1):25–45Google Scholar
  4. Brandt L, Rawski GT (2008) China’s great economic transformation. Cambridge University Press, CambridgeGoogle Scholar
  5. Central Policy Unit, HKSAR Government (2004) Report on Hong Kong and Pan-Pearl River Delta Regional Cooperation. Central Policy Unit, HKSAR Government, Hong KongGoogle Scholar
  6. Dinar A, Wolf A (1997) Economic and political considerations in regional cooperation models. Agric Resour Econ Rev 72(26):368–376Google Scholar
  7. Fujita M, Hu D (2001) Regional disparity in china 1985–1994: the effects of globalization and economic liberalization. Ann Reg Sci 35(1):3–37CrossRefGoogle Scholar
  8. Huang XG (1996) The fiscal system reform and local protectionism. Econ Res J 2:37–40 (in Chinese)Google Scholar
  9. Jin H, Qian Y, Weingast BR (2005) Regional decentralization and fiscal incentives: federalism. Chinese style. J Public Econ 89(9–10):1719–1742CrossRefGoogle Scholar
  10. Kumar A (1994) China: internal market development and regulation. The World Bank, WashingtonGoogle Scholar
  11. Lazear E, Rosen S (1981) Rank-order tournaments as optimal labor contracts. J Polit Econ 89(5):841–864CrossRefGoogle Scholar
  12. Li H, Zhou LA (2004) Political turnover and economic performance: the incentive role of personnel control in China. J Public Econ 89(9–10):1743–1762Google Scholar
  13. Li ST, Hou YZ, Liu YZ, Chen B (2004) The analysis on survey of local protection in China domestic market. Econ Res J 11:78–84 (in Chinese)Google Scholar
  14. Montinola G, Qian Y, Weingast BR (1995) Federalism, Chinese style: the political basis for economic success in China. World Polit 48(1):50–81CrossRefGoogle Scholar
  15. Oye KA (1985) Explaining cooperation under anarchy: hypotheses and strategies. World Polit 38(1):1–24CrossRefGoogle Scholar
  16. Powell R (1991) Absolute and relative gains in international relations theory. Am Polit Sci Rev 85(4):1303–1320CrossRefGoogle Scholar
  17. Qian Y, Weingast BR (1996) China’s transition to markets: market-preserving federalism. Chinese style. J Policy Reform 1(2):149–185CrossRefGoogle Scholar
  18. Shen LR, Dai YC (1990) The formation, defect and cause of China’s ‘feudal economy’. Econ Res J 3(12–19):67 (in Chinese)Google Scholar
  19. Sheng YM (2003) Governing globalization at home: the political economy of central-provincial relations in China 1977–2002. Ph.D. thesis, Yale University, New HavenGoogle Scholar
  20. Snidal D (1991a) International cooperation among relative gains maximizers. Int Stud Q 35(4):387–402CrossRefGoogle Scholar
  21. Snidal D (1991b) Relative gains and the pattern of international cooperation. Am Polit Sci Rev 85(3):701–726CrossRefGoogle Scholar
  22. Taylor M (1976) Anarchy and cooperation. Wiley, LondonGoogle Scholar
  23. Taylor M (1987) The possibility of cooperation. Cambridge University Press, CambridgeGoogle Scholar
  24. Voslensky M (1984) Nomenklatura: the Soviet ruling class. Doubleday, New YorkGoogle Scholar
  25. Waltz KN (1959) Man, the state and war: a theoretical analysis. Columbia University Press, New YorkGoogle Scholar
  26. Waltz KN (1979) Theory of international politics. Addison-Wesley, ReadingGoogle Scholar
  27. Wang Y (2014) Whither federalism, Chinese style. In: Yuan ZG (ed) Economic transition in China. World Scientific, Singapore, pp 175–209CrossRefGoogle Scholar
  28. Wedeman AH (2003) From Mao to market: rent seeking, local protectionism, and marketization in China. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  29. Xu X, Li X, Wang M (2007) Regional integration, economic growth and political promotion. China Econ Q 6(4):1075–1096 (in Chinese)Google Scholar
  30. Yeh AGO, Xu J (2008) Regional cooperation in the Pan-Pearl River Delta: a formulaic aspiration or a new imagination? Built Environ 34(4):408–426CrossRefGoogle Scholar
  31. Yeung YM (2005) Emergence of the Pan-Pearl River Delta. Geogr Ann Ser B 87(1):75–79CrossRefGoogle Scholar
  32. Yin WQ, Cai WR (2001) The genesis of regional barriers in China’s local market and countermeasures. Econ Res J 6:3–12 (in Chinese)Google Scholar
  33. Young A (2000) The Razor’s edge: distortions and incremental reform in China. Q J Econ 115(4):1091–1135CrossRefGoogle Scholar
  34. Zeng JJ (2015) Policy textual and quantitative research on the Pan Pearl River Delta regional cooperation. Chin Public Adm 7:110–116 (in Chinese)Google Scholar
  35. Zhou LA (2004) The incentive and cooperation of government officials in the political tournaments: an interpretation of the prolonged local protectionism and duplicative investments in China. Econ Res J 6:33–40 (in Chinese)Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.School of Architecture and Urban PlanningShenzhen UniversityShenzhenChina
  2. 2.Department of Urban Planning and Design and Centre of Urban Studies and Urban PlanningThe University of Hong KongPok Fu LamChina
  3. 3.SRS Consortium for Advanced Study in Cooperative Dynamic GamesHong Kong Shue Yan UniversityEastern DistrictChina

Personalised recommendations