Date of Award

5-12-2024

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Social Science

Advisor(s)

Yilin Hou

Subject Categories

Public Administration | Public Affairs, Public Policy and Public Administration | Social and Behavioral Sciences

Abstract

This dissertation consists of four chapters that focus on the policy process of provincial industrial policymaking targeting the manufacturing sector in China. In the first chapter, I introduce an original dataset called the "Chinese Industrial Policy Attention Dataset" (CIPAD). CIPAD contains 612 central-level and 1907 provincial-level Chinese industrial policies issued between 2001 and 2019. A novel design of CIPAD is that the full text of each industrial policy is transformed into a distribution-of-attention vector which records the attention allocation of each policy among 155 finely segmented industrial categories in the manufacturing sector. By transforming industrial policies into distribution-of-attention vectors, CIPAD allows researchers to quickly identify the industry categories that receive the most attention from governments and to quickly compare similarities between different industrial policies. In Chapter 2, I examine the phenomenon of industrial policy convergence among 30 provincial governments in China. Policy convergence is common both within and across countries. However, the concept has not received as much attention as some related concepts such as policy diffusion and policy learning. In this chapter, I study policy convergence from the perspective of policy similarity networks which provide a rigorous and straightforward way to measure, visualize, and study the phenomenon. By analyzing industrial policy data from CIPAD, I find a dramatic convergence of industrial policies in 30 provinces in mainland China between 2015 and 2019. Applying the additive and multiplicative effects network models (AMEN models), I find that provincial governments tend to adopt very similar industrial policies when 1) they have similar local industrial structures or 2) they are both highly susceptible to central industrial policies. Moreover, I find strong evidence that the dramatic industrial policy convergence across Chinese provinces is mainly caused by the overall increasing susceptibility of provincial governments to central industrial policies issued by the State Council (i.e., the chief administrative authority of China) after 2015. In Chapter 3, I go one step further and discuss why Chinese provincial governments are becoming increasingly susceptible to central industrial policy. Here, I argue that top-down inspection as a central political control instrument reduces provincial governments' preference for using discretion in industrial policymaking. As a result, provincial governments become more likely to simply follow what the central government has done, thus showing increasing susceptibility to central industrial policies. I test this claim by examining the effect of central disciplinary inspections on provincial industrial policymaking in China. Using data from CIPAD, I find that provincial governments significantly decrease their preference for using discretion in industrial policymaking during inspection-active periods. This is evidenced by a reduced willingness of provincial governments to target those industrial categories that were not previously targeted by central industrial policy. Moreover, I find that central disciplinary inspections have a stronger impact on uninspected provinces that observe their peers being inspected than on provinces that are themselves being inspected. Additional analysis suggests that central disciplinary inspections, by dampening bureaucrats' preference for discretion in policymaking, lead to increasing policy homogeneity across provinces in China. In Chapter 4, I examine the underlying motives of provincial governments to selectively support certain industry categories in the manufacturing sector after controlling for the impact of central industrial policies. I develop several hypotheses based on two conflicting assumptions about government behavior. The first assumption is that the government behaves as a benevolent and omniscient policymaker and selectively supports industry categories to address market failures. The second assumption is that the government behaves as a self-interested agent who is driven by two main motives: 1) to obtain private benefits by engaging in rent-seeking activities with special interest groups and 2) to pursue job promotion or re-election in government. Based on data from CIPAD, I find that provincial leaders in China who are driven by the motive of job promotion adopt an “output-oriented strategy” which supports industry categories that have already created large value-added output either within the jurisdiction or in other jurisdictions. I also find that provincial governments have some ability to identify and support industry categories that have revealed comparative advantage locally. Moreover, there is evidence that after 2008 Chinese provincial governments have begun to support industry categories that are dominated by high-income countries. This shows the intention of Chinese provincial governments to cultivate their competence in industry categories with imperfect competition and high rents.

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