政治制度在塑造中国干部行为中的作用及其与 1978 年后经济成果的联系

The Role Of Political Institutions In Shaping Cadre Behaviour in China And Its Links To Economic Outcomes After 1978

Abstract

Initiated in 1978, China's economic reform and opening-up policy has progressively extended from rural to urban areas, spanning from the coastlines to the inland regions and covering territories from the east to the west. The path, strategies, outcomes, and challenges of this economic transformation are intricately intertwined with China's unique political and economic architecture—a deliberately constructed system designed to navigate and structure political, economic, and social interactions, as elucidated by Douglas North in "Institutions, Institutional Change, and Economic Performance.1"

Contrary to being spontaneous, the evolution of China's market economy has been carefully calibrated and state-guided. China's political authority had a pervasive influence, moulding the nation's economic framework and shaping its trajectory.

This paper endeavours to dissect and analyze these dynamics, drawing upon the perspectives of scholars such as Xu Chenggang, Barry Naughton, Douglas North, and Sebastian Heilmann. It will delve into how China's political system has re-engineered incentives for officials, deconstructed policy-making constraints, and steered a value transformation. In doing so, it has adeptly navigated official behaviours towards bolstering economic development, catalyzing a sweeping economic and social metamorphosis at a macroscopic level.

The paper will explore the linkage between political performance, promotion prospects, and local economic development in conjunction with the cadre evaluation system. It will first analyze how the political system has redefined the behavioural paradigms of Chinese cadres and officials by recalibrating incentives and fostering economic progression. Subsequently, the discussion will pivot to how the political framework imposes constraints, shaping official conduct through mechanisms such as, but not limited to, market integration, accountability systems, regional decentralization, and financial incentives. Lastly, the paper will delve into the transformation of values, examining shifts in leadership styles, governance philosophies, and attitudes towards technological innovation under political openness. This multifaceted analysis aims to unravel how the political apparatus has been instrumental in channelling official behaviours towards expediting China's economic development, leaving an indelible imprint on the nation's socio-economic landscape.

Introduction & Modification of Incentive Mechanisms

In the ever-evolving political landscape of China, the relentless pursuit of career advancement, enhanced reputation, and increased local influence by officials have significantly shaped their behaviours and actions; subsequently altering the dynamics of the political system. This transformation is primarily attributed to the introduction and modification of various incentive mechanisms, such as the performance evaluation system, and the cadre evaluation system, as well as the explicit linkage of promotional opportunities to regional economic gross domestic product (GDP).

Performance Evaluation System

At the forefront of this transformation is China's performance evaluation system, which meticulously intertwines the career progression of local officials with a myriad of economic indicators, including GDP growth, tax revenue, and jurisdictional employment rates. This system ingeniously motivates local officials to channel their efforts and resources toward bolstering local economic development, leveraging their authority to influence and drive change. As a result, officials are aware that their career trajectories are intricately linked to their ability to contribute to economic prosperity, hence propelled to enhance their performance in those manners.

This intricate relationship between performance and progression is particularly pronounced among provincial leaders, where the amalgamation of performance and relationships dictates promotional opportunities2. This duality ensures that only those officials who demonstrate competence and foster cooperative relationships ascend the hierarchical ladder, thereby providing a harmonious balance between ability and loyalty within the political sphere.

Since 1978 the inception of the reform and opening-up policy, China has undergone profound social transformations, with the state-society relationship undergoing a radical recalibration. Policies such as the "double hundred" and the rural responsibility system have played pivotal roles in granting both enterprises and farmers greater operational autonomy, sparking productivity and economic vitality across the country, solving the contradiction like while China has a severe famine, it also exports a certain amount of food in order reflect national strength. The household contract responsibility system3, a prime example of these transformative policies, has not only elevated agricultural efficiency but also facilitated the mass migration of rural labour to urban enterprises and cities, thereby contributing to industrial restructuring and sustained economic growth.

Local officials have been instrumental in this transformative journey, exhibiting remarkable initiative in reforming rural economic management systems and zealously promoting new enterprise systems to attract investment and enhance regional infrastructure. These proactive measures have yielded dual benefits, catalyzing economic development while securing enhanced political performance and promotional prospects for officials. The performance evaluation system lies at the heart of this dynamic, acting as a crucial incentive mechanism that aligns official behaviours with national development objectives.

Concurrently, China's commitment to nurturing the private sector and fortifying its stock market and financial systems has both broadened the horizons of economic growth and also augmented the competitiveness of local economies. This synergy between state autonomy and performance legitimacy underscores the essence of China's economic success story, highlighting the indispensable role of the performance evaluation system within the modern Chinese political framework. Collectively, these systems have laid a robust foundation for China's economic and political stability, propelling the nation toward development.

Cadre Evaluation System

The cadre evaluation system, an integral component of China's intra-party supervision machinery, plays a critical role in curbing power concentration, enhancing democratic centralism, and preventing authority misuse. To this end, discipline inspection commissions have been established across all levels of the Communist Party of China (CCP) to serve as internal watchdogs upholding accountability and integrity within the Party.4 The cadre assessment system has undergone extensive transformations throughout different historical epochs, evolving from a system anchored in political loyalty and material distribution to one emphasizing economic performance, capability, and merit.

Gross Domestic Product

In the initial post-1949 era, political allegiance and performance predominantly influenced official promotions. However, post-1978, as the nation pivoted towards economic revitalization, GDP growth and fiscal revenue emerged as pivotal benchmarks in cadre evaluation, culminating in the establishment of an evaluation mechanism centred around economic contribution. Over time, this system has been meticulously refined, transitioning

from a singular focus on political alignment to a holistic evaluation framework encompassing economic performance, personal capability, and various other dimensions.

For local officials, their ability to spur local economic growth has become a crucial determinant of their career progression. Additionally, mechanisms such as dismissal, retirement, and demotion have been integrated into the incentive structure, further aligning official behaviours with national development objectives: officials who do not perform well at work will be transferred to remote provinces, or, they can give up their real power but have a glorious title to retire when they achieve certain achievements. These comprehensive institutional reforms and policy initiatives have been instrumental in solidifying China's economic foundation and ensuring political stability.

In this intricate political institution, this complex network of evaluation and incentive systems also has significantly influenced the behaviours of Chinese officials. The CCP, with its vast membership exceeding 65 million individuals, exerted a profound influence across all societal facets. Despite perceptions of opacity, its operations have progressively become more influential. In summary, the intricate interplay of incentive systems, official behaviours, and national development objectives painted a vivid picture of China's unique political landscape.

Political Framework Constraints

The political system in China has undergone significant transformations in response to societal pressures and expectations, particularly with the introduction of a market economy, regional decentralization, and fiscal incentives. These changes have played a pivotal role in moulding the behaviours of Chinese officials and fostering economic progress.

After the tumultuous period of the "Cultural Revolution," China grappled with pervasive poverty and economic stagnation5. The country's leadership, spanning from the topmost echelons to the grassroots, recognized the pressing need for transformative change, leading to the implementation of the reform and opening-up policy. This strategic initiative aimed to spur rapid economic growth through a series of substantial changes.

The political landscape of China faced immense pressures during this period, necessitating a reevaluation and transformation of various relationships, including those between the Party and the government, the government and enterprises, and within the governmental functions themselves. This reshaping of the political system led to new behavioural norms among cadres and officials, ultimately contributing positively to the country's economic development.

Introduction of Market Economy

A pivotal aspect of this transformation was the introduction of a market economy, marking a significant shift from the previous planned economic system. This strategic pivot was not just a change in the economic policy but a fundamental reorientation aimed at unleashing the nation's productive forces. Party members and cadres, who had traditionally focused on ideological goals, were now increasingly tasked with driving economic construction. Despite the spontaneity of the real world market leading to some degree of disorder and inefficiency in resource allocation, for example, the removal of price controls leads to abnormal inflation or deflation, leading to economic instability, the government's macro-control functions like fiscal policy and established certain regulations played a crucial role in mitigating these issues6.

Local officials were central to this process, fostering the market-oriented operations of local enterprises and actively seeking market opportunities. The political hierarchy was instrumental in this economic transformation, although the system itself underwent significant changes during the transition. Key economic policies structured by national

leaders were characterized by initial decentralization and resource sharing. The open-door policy, in particular, despite resulting in politicians losing some control over the distribution of benefits and incentives, ultimately enhanced social vitality and propelled economic development.

In the context of state-owned enterprise reform, the introduction of market mechanisms led to more market-oriented operations, enhancing efficiency and driving for profitability. Simultaneously, the government adjusted its functions and promoted managerial reforms in these enterprises, expanding their operational autonomy. Collectively, these reforms were instrumental in establishing a socialist market economy system with the Chinese characteristics, fulfilling the requirements of market economy development.

Regional Decentralization & Fiscal Incentives

Regional decentralization and fiscal incentives also played a pivotal role in local governments' economic decision-making and management of social affairs. The devolution of control over investments and resources to local governments enabled them to participate in policy formulation and implementation. Known as the RDA regime, this system combined political centralization with economic regional decentralization, granting local governments significant autonomy in driving reforms, delivering public services, and enforcing laws.

The fiscal system reform further strengthened local governments' economic autonomy. Transitioning from a financial contract system to a tax-sharing system allowed local governments to retain a larger share of tax revenues, incentivizing them to support and develop local industries. However, this fiscal decentralization and performance evaluation system focused on economic outcomes resulted in intense fiscal competition among local governments. In pursuing career advancement, local officials invested heavily in infrastructure, directly impacting economic performance and leading to imbalances in fiscal expenditure.

The tax system reform and fiscal decentralization also granted local governments more autonomy in budgeting, enabling them to tailor economic strategies to local conditions and fostering diverse economic development. Consequently, local officials emphasized local economic development and tax revenue growth, leading to a competitive regional economy and rapid industrial development.

Since the reform and opening-up policy, there have been significant reforms in the duties and conduct of cadres, emphasizing legal compliance in decision-making, which in turn boosted investment confidence, improved the market environment, and established accountability mechanisms. The political system is optimized through the strengthening of legislative and supervisory roles of the people's congresses and the enhancement of the electoral system. Beginning in 1979, China embarked on a journey to restore and rebuild its socialist legal system, continuously improving its legal framework in civil, administrative, and commercial domains7. By 1997, the rule of law became a central strategy of national governance.

These reforms have resulted in more standardized, transparent, and cautious official behaviours, enhancing government efficiency through strengthened legal and oversight mechanisms. Local governments have adopted accountability systems, clearly defining responsibilities and objectives, particularly economically. The introduction of economic accountability has made local leaders directly responsible for their region's economic performance. Before the reforms, all enterprise profits were remitted to the state, and enterprise performance did not influence cadre treatment. Post-reform, enterprises assumed responsibility for their own profits and losses. This shift motivated cadres and managers to focus more on enterprise efficiency and profitability, enhancing enterprise efficiency and labour productivity.

Local officials gained greater authority with investment approvals.8 The reduction of administrative approvals simplified bureaucratic processes, reducing the business burden and making it easier for officials to attract and retain investment, enhanced business autonomy, and invigorated the market.

In summary, through extensive political and economic reforms, the Chinese government has successfully guided and shaped official behaviours, contributing to rapid economic development. These reforms have not only facilitated market development and government efficiency but also invigorated local governments and enterprises, leading to competitive and diversified local economies. However, these changes have also introduced challenges, such as fiscal expenditure distortions and intense local government competition, which necessitate further reforms and adjustments.

Political Transformation

Tracing back to the late 20th century, China's political landscape has undergone a dramatic shift, significantly altering the behaviours of Chinese officials and propelling the nation's economy forward. This transformation, rooted in governmental ambitions and societal transformations, has manifested through a change in leadership styles, governance philosophies, a surge in political transparency, and a forward-thinking attitude toward technological innovation.

In 1978, China found itself in an economic quagmire, with a per capita GDP of just

381 ¥ (converted to $71.91 CAD), ranking it 134th in the world when adjusted for exchange

rates at the time. The Third Plenary Session of the 11th CPC Central Committee convened in

December 1978, marked a turning point. It set the stage for a series of reforms that reshaped

China's economic system, transitioning it from a planned economy to a more market-oriented one. This shift in ideology and practice laid the foundation for China's meteoric rise in the global economic arena.

Innovation & Technological Advancement

Innovation, placed at the heart of China's development strategy, was recognized as a key driver for economic growth and prosperity. This realization led to a significant shift in the behaviours of Chinese officials, encouraging them to foster an environment conducive to innovation and technological advancement. The importance of this shift is underscored by the work of Joel Mokyr in 'The Lever of Riches', highlighting innovation's capacity to augment output without necessitating a corresponding increase in input.

Change in Leadership Styles & Governance Philosophies

Simultaneously, the establishment of the socialist market economic system marked a new chapter in China's economic and political development, necessitating a higher calibre of competence and integrity among officials. This was particularly crucial in light of the growing friction between the old system and emerging interest groups. The government's response was to revamp the cadre education and training systems, ensuring a consistent supply of skilled personnel aimed to drive China's economic ambitions forward.

Culturally, the government's "going out" policy played a pivotal role in amplifying China's global cultural influence, yielding both direct and indirect economic benefits. This policy, alongside a more open political system, galvanized officials to actively participate in policy formulation and social governance. Strategic planning, including five-year plans, has ensured a balanced consideration of both immediate and long-term objectives, reflecting a more holistic approach to governance. The CCP, as the central of the political system, has undergone a profound transformation in its governing philosophy since 1978, adopting ideologies that resonate with contemporary realities, optimizing resource allocation, and creating a supportive policy environment for officials.

Political Transparency

To enhance political openness and stimulate reform-oriented behaviours among officials, China redefined its international engagement strategy, placing a priority on attracting foreign investment. This strategic pivot has resulted in the creation of special economic zones and the opening up of key coastal cities, creating a fertile ground for foreign capital, technology transfer, and economic growth. This opening up was further solidified by China's accession to the World Trade Organization (WTO) in 2001, marking a significant milestone in its integration into the global economy. Local officials were now more than ever incentivized to attract foreign investment, adopt international best practices, and drive local economic growth9. China, from a closed economy to a global economic powerhouse, is a testament to the transformative power of its political system. By reshaping the behaviours of officials, embracing innovation, and fostering a more open and inclusive development model, China improved a course of progress and prosperity. While challenges and contradictions remain, the nation is committed to continuous reform, innovation, and balanced development.

Going Forward

Since embarking on the path of reform and opening up, China has had a meteoric rise in economic prosperity, lifting hundreds of millions out of poverty, achieving rapid industrialization, and advancing urbanization. However, this journey has not been without its contradictions and challenges, which must be confronted and addressed head-on. Gazing into the future, it becomes increasingly crucial to scrutinize the influence of the political system on officials' behaviours, ensuring alignment with the nation's long-term objectives and the fundamental well-being of its citizens. Moreover, although China's political system has indeed catalyzed substantial economic growth and social transformation, it is imperative to acknowledge its imperfections. Mechanisms like "land finance" have given rise to issues such as real estate bubbles, excessive urbanization of land, corruption, bribery, and partial urbanization of populations, posing significant challenges to China's economic transition and pursuit of high-quality development. These challenges necessitate thoughtful reflection and essential reforms.

Although the political system has played a pivotal role in steering officials' behaviours and spurring economic and social progress, a blind eye cannot be turned to the existing issues and limitations. While the political system has been a critical driver of development, commitment to continuous improvement and problem-solving remains essential.

1 Douglass C. North, “Institutions, Institutional Change and Economic Performance,” Cambridge Core, accessed October 10, 2023, https://www.cambridge.org/core/books/institutions-institutional-change-and-economic-performance/AAE1E27D F8996E24C5DD07EB79BBA7EE.

2 Sebastian Heilmann, “Policy Experimentation in China’s Economic Rise - Studies in Comparative International Development,” SpringerLink, December 27, 2007, https://link.springer.com/article/10.1007/s12116-007-9014-4.

3 Hehui Jin a et al., “Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style,” Journal of Public Economics, April 25, 2005, https://www.sciencedirect.com/science/article/pii/S0047272705000228.

4 The political economy of China’s economic transition - researchgate, accessed October 17, 2023, https://www.researchgate.net/profile/Barry-Naughton/publication/285767067_A_Political_Economy_of_China %27s_Economic_Transition/links/5ee6dca092851ce9e7e3b31c/A-Political-Economy-of-Chinas-Economic-Tran sition?origin=publication_detail.

5 Why China’s economic reforms differ: The M‐form hierarchy and entry ..., accessed October 17, 2023, https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-0351.1993.tb00077.x.

6 “China’s Trapped Transition - Minxin Pei,” - Minxin Pei | Harvard University Press, accessed October 16, 2023, https://www.hup.harvard.edu/catalog.php?isbn=9780674027541.

7 Barry Naughton, “Growing out of the Plan,” Cambridge Core, accessed October 18, 2023, https://www.cambridge.org/core/books/growing-out-of-the-plan/4500F9826731A4765F9B6C2EFCE7AD53.

8 William Easterly, The Elusive Quest for growth: Economists ..., accessed October 16, 2023, https://www.researchgate.net/publication/226466606_William_Easterly_The_Elusive_Quest_for_Growth_Econ omists’_Adventures_and_Misadventures_in_the_Tropics.

9Chenggang Xu, “The Fundamental Institutions of China’s Reforms and Development,” Journal of Economic Literature, accessed October 20, 2023, https://www.aeaweb.org/articles?id=10.1257%2Fjel.49.4.1076.

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