Ties that Bind: Connections, Institutions and Economics in the People’s Republic of China

Abstract

This dissertation will contend that China’s paramount leader, the General Secretary,in order to compete with rival elites, in the face of strong institutional constraintsand limitations upon how they can engage in that competition, manipulates thedistribution of state fiscal resources to benefit their political clients in the provinces.This newly empowered client network aid their political survival in office and isconstitutive of their political influence both while in office and after they have left it.Specifically, the dissertation expects that the General Secretary will direct greateramounts of intergovernmental transfers into provinces which are run by their politicalclients. More narrowly, it expects that the effect will be found only for specific-purpose transfers, which are largely under the discretion of the incumbent GeneralSecretary, and will not be found for general-purpose transfers, the allocation of whichis less subject to political manipulation by the incumbent. These transfers, in turn,generate additional taxable economic activity in the provinces into which they aredirected. This augmented taxable economic activity leads to increased collection offiscal revenue in the provinces of incumbent clients. This, in turn, makes these clientsmore promising candidates for future advancement within the party, because fiscalrevenue collection is a core metric for the advancement of elites at the provincial level,as adjudicated by the CCP’s organization department. Consequently, incumbentGeneral Secretaries are able to push forward the careers of their provincial clients,and thus advance their own political interests, through systematic favoritism in theirivdistribution of specific purpose intergovernmental transfers. Importantly, one of thekey theoretical results of this work is the finding that Chinese central leaders areinstitutionally constrained to make their clients measure up and that the artificialaugmentation of the provincial fiscal revenues of clients are a key means by which theyensure that their clients ”make the grade” in the eyes of the organization department.