Public Choice

, Volume 175, Issue 1–2, pp 197–214 | Cite as

Logrolling under fragmented authoritarianism: theory and evidence from China

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Abstract

This paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non-democratic political system. In particular, we focus on China, where bureaucratic interest groups are separate vertical organizations reaching down from Beijing to the provinces and cities. The key question in this paper is: what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies? We address this question both theoretically and empirically. The theory predicts a specific distortion in resource allocation because of logrolling, while the empirical results confirm the theoretical prediction. We find policy outcomes under logrolling are characterized by excessive spending on all the interest groups’ preferred goods and insufficient spending on public goods. We test the existence of logrolling between the Ministry of Civil Affairs and Ministry of Health in China. Our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies.

Keywords

Authoritarianism Policy making Logrolling China 
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Notes

Acknowledgements

The first draft of this paper was written while Yuan Li was visiting the Department of Economics, Management, and Statistics at University of Milan-Bicocca. It was completed a year and half later when Mario Gilli was visiting the Institute of East Asian Studies at the University of Duisburg-Essen. We would like to thank Susan Shirk, Chongen Bai, Massimo Bordignon, Loren Brandt, Martin Gregor, Crino Rosario, Gert Tinggaard Svendsen, Athar Hussain, Pinghan Liang for their comments and insights. We also thank the participants at the First USCD-Tsinghua Conference on China’s Political Economy, European Public Choice Society Annual Meeting 2015, the 19th Annual Conference of the International Society for New Institutional Economics, and the 2nd Biennial Conference of China Development Studies, the 2015 Chinese Economic Association (Europe/United Kingdom) Annual Conference, the 30th annual congress of the European Economic Association, and seminars at Fudan University, Nanjing University, Nanjing University of Science and Technology, Southwestern University of Finance and Economics, Catholic University of Milan for helpful discussions.

Supplementary material

11127_2018_526_MOESM1_ESM.pdf (921 kb)
Supplementary material 1 (PDF 920 kb)
11127_2018_526_MOESM2_ESM.pdf (1.6 mb)
Supplementary material 2 (PDF 1615 kb)

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Economics, Quantitative Methods and Business StrategyUniversity of Milan-BicoccaMilanItaly
  2. 2.Mercator School of Management and Institute of East Asian StudiesUniversity of Duisburg-EssenDuisburgGermany
  3. 3.East Asian InstituteNational University of SingaporeSingaporeSingapore

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