Date of Award

June 2017

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Political Science

Advisor(s)

Margarita Estévez-Abe

Keywords

Center-local relations, China, Old-age pension, Subnational variations

Subject Categories

Social and Behavioral Sciences

Abstract

Welfare provisions are commonly regarded as an intrinsic product of democracy. Why do authoritarian rulers provide welfare programs to the people? How do authoritarian rulers promote welfare development under decentralized authoritarianism? This dissertation investigates these theoretical puzzles through a detailed study of the urban pension program for enterprise employees in authoritarian China. The decentralized fiscal and administrative structure in China makes the operation of the pension program a particularly challenging one. What are the redistributive incentives of the Chinese rulers? How does the central government differ from local governments in their redistributive calculation? How do these two levels of governments interact to ensure implementation of an expensive pension program? These are the questions this dissertation is set to address. This dissertation argues that while the Chinese central government more resembles long-sighted rulers and emphasizes welfare development, subnational governments are more short-sighted, being more motivated to promote short-term economic growth. The conflict of interests between these two actors leads to the classic principal-agent problem. This dissertation argues that the center uses fiscal subsidies as a leash to lead and restrain subnational governments, particularly those from regions with strategic importance to the center, to ensure proper implementation of the desired pension program. As the center’s fiscal subsidies reduce the costs of welfare programs, subnational governments with center fiscal support are more incentivized to promote welfare development. Therefore, the center’s subsidy program creates an uneven base of redistributive incentives for its subnational rulers. In addition to the availability of center fiscal support, this dissertation contends that the level of economic openness in a locality also shapes subnational governments’ redistributive incentives. Being afraid of capital flight, subnational governments in localities with a higher level of economic openness oftentimes discount welfare responsibility for investors with mobile assets. In localities where state-owned investments account for a larger share of the economy, the governments can impose higher taxes for welfare development. By combining these two factors – the availability of center fiscal support, and the level of economic openness – this study proposes five types of fiscal structure of the pension program at the subnational level.

This dissertation’s contribution is threefold. First, it promises to enrich the existing literature on comparative welfare states, by filling the void in the redistributive incentives of authoritarian rulers. Second, instead of treating authoritarian rulers as a unitary actor, this study highlights the role of subnational governments in welfare politics, and details the center-local interplays in redistribution under the Chinese decentralized political system. This dissertation finds that the center uses fiscal subsidy programs to regulate its subnational governments. In so doing, this study also sheds new light on center-local relations in Chinese politics. Third, instead of attributing the Chinese regime’s authoritarian resilience to formal institutions, this dissertation contends that welfare programs, like the urban pension program, are employed by Chinese rulers to pre-empt and resolve public oppositions and thus to increase the regime’s resilience.

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Open Access

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