Interjurisdiction Competition and the Political Welfare Cycle in China

• In Event: Economic Change and the Welfare State

Abstract

China’s rapid economic ascent is often attributed to a political tournament model, yet the implications of such interjurisdictional competition on local social welfare investment remain underexplored. This study posits that local officials, vying for promotion, may prioritize immediate economic gains over social welfare initiatives, which typically yield less visible benefits and require a sustained, long-term investment. We hypothesize that heightened political competition among jurisdictions incentivizes officials to allocate funds in a manner conducive to career advancement, often at the expense of social welfare spending. This trend is particularly pronounced during the initial phase of a city leader's tenure when the likelihood of promotion is uncertain, thereby inducing a cyclical pattern in welfare policy. Our analysis utilizes a comprehensive panel dataset spanning prefecture-level regions to substantiate our claims empirically.

Authors

• Yanjun Liu, Peking University

• Liwei Zhou, Peking University School of Government

• Chaofan Ren, Peking university