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China's new rural tax reform that started in 2000 reduced the rural residents' financial burden. However, it gave rise to a serious problem of local fiscal crises, and significantly weakened the provision of public goods in poorly-endowed agricultural areas. Why did the reform aimed at enhancing the quality of provided public goods fail to do just that in areas that needed it most? Moreover, why did the central government make the decision of this tax reform despite giving the rise to local fiscal crises? I argue that the center's decision becomes less puzzling when considering an often overlooked factor: the center's policy preferences. In particular, I show that though the center has an interest in allowing local governments to collect taxes and provide public goods, this interest is not as strong as its commitment to market-oriented reforms and socio-political stability. When this interest and the commitment conflict-as they did when the increase in local levies sparked rural unrest in the 1990s-the center places its own political survival before local fiscal health. The adoption of the 2000 tax reform reflects the center's willingness to sacrifice the latter for the former. Moreover, by appearing to side with the peasants against predatory agents of the local state, the central government managed to re-channel the blame for bad governance onto local officials-thereby strengthening its own authority. Since local cadres are appointed by their superior government in China's authoritarian regime, they have few avenues through which to articulate their grievances against the central government when they are harmed by the center's reform policies. And yet, the personnel system in which local cadres are not popularly elected but appointed by higher authorities creates an institutional incentive for them to shirk and disguise the accurate information in their locality. Therefore, though the central government succeeds in strengthening its authority, it fails to grasp the reality of local governance in rural areas. This paper carries out the theoretical presentation of this discussion with the help of a game-theoretic model. A series of comparative-static exercises with the simple model are used to examine how nationally implemented reform policies have influenced the relationship between villagers and their local governments depending on pre-existing local conditions. The analysis in this paper shows that the increased possibility of outbound migration gave villagers substantial bargaining power against their local governments in rich areas, while it did not give them real power in poor areas. The easier outbound migration strengthened the villagers' bargaining power vis-à-vis their local government up to a certain threshold where the local government was forced to raise levies on non-migratory villagers to replenish its dwindling treasury, thereby triggering renewed popular resistance. Moreover, rural industrialization in richer areas served to delay the onset of this threshold, suggesting that local governments in more industrialized areas were able to avoid raising levies, while local governments in poorer agricultural areas tended to increase them. As a result, the model predicts that the financial burden in China's rural areas will have regressive characteristics. Since taxes and fees became a source of contention between villagers and local governments, the CCP leadership institutionalized certain participatory channels to defuse popular grievances. The petition system is one of those institutions. It is a remonstrative institution, through which villagers can challenge their local government's decisions and higher authorities can monitor lower-level governments' behavior... ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

In the summer of 2008, two similar popular protests broke out about the same time in two adjacent underdeveloped counties in southwest China. However, they evolved along remarkably different trajectories: one incident was resolved rather quickly and peacefully by local authorities without making a stir; while the other escalated into a major, violent clash between local residents and authorities. Reports and on-site visit suggest an important cause to the disparate results of the two incidents: availability of natural resources in the second case. As comparative studies suggest, the abundance of natural resources often contribute to the occurrence of social conflicts and even civil wars by motivating the contest for resource control, creating grievance among the populace, and leading to weak political institutions. Does resource curse work in the same ways in China? This paper explores how the availability of natural resources affects social instability in China by a comparative study of the two abovementioned counties. While it confirms some of the common wisdom, it also suggests more nuanced mechanism under China's peculiar political system, through which the availability (or lack) of mineral resources affects the style of local governance and state-society relations, which consequently shape the likelihood of social instability. [ABSTRACT FROM AUTHOR]

In tying together general issues of subnational comparative analysis and the study of specific empirical phenomena in China, this paper examines: 1) which aspects of subnational comparative analysis used elsewhere can usefully inform the study of Chinese politics in general; 2) how one particular form of subnational comparison can help us understand the unfolding dynamics of Chinese state sector lay-offs; and 3) how this form of subnational comparative analysis might usefully be extended back into other areas of the wider field of comparative politics in a way that refines and sharpens the practice of subnational comparison elsewhere. ..PAT.-Conference Proceeding [ABSTRACT FROM AUTHOR]

This paper seeks to explain the divergent outcomes of pension reform in China as a strategic response by local governments to inflows (and outflows) of labor and capital. I argue that local governments developed qualitatively different pension and social insurance arrangements that corresponded to two factors: population aging, and the extent of labor and capital inflows. The behavior of local labor agencies is consistent with the tenets of resource dependence theory, which predicts that organizations will adopt strategies to gain control of, or lessen their dependence upon, crucial external resources. The empirical tests of the argument involve provincial-level quantitative data as well as elite interviews. ..PAT.-Conference Proceeding [ABSTRACT FROM AUTHOR]

In contrast to the "race-to-the-bottom" tax competition in democracies, we argue that the logic of interjurisdiction competition in authoritarian regimes leads to greater fiscal extraction. Promotion-seeking local politicians are incentivized to signal loyalty and competence to their principals through tangible fiscal revenues. The greater the number of agents accountable to the same principal, the more the intense competition for promotion, resulting in higher taxation; however, excessive taxation is constrained by the risks of political instability. Using a panel dataset of Chinese county government finance between 1999 and 2006, we find strong evidence for an inverse U-shaped relationship between the number of county-level jurisdictions within a prefecture/municipality--our proxy for the intensity of political competition--and fiscal extraction in most provinces but not so in politically unstable ethnic minority regions. The results are robust to various alternative specifications, including models that account for spatial interdependence of taxation. [ABSTRACT FROM AUTHOR]

Why have special zones in China had considerably different performances in attracting FDI despite their similar flexible institutional setup? I argue that operations of foreign firms were embedded in dense local institutions that shape the interactions between local governments and foreign firms. In particular, I argue that three institutional factors are particularly important in affecting the credibility of local investment environment. Political authority, determined by the designated level of special zones, shapes local governments' political leverage and economic resources; administrative capacity, determined by local governance structures (separate vs. unified), affects the efficiency and effectiveness of local policymaking; regulatory environment creates a legal base to constrain local governments' discretionary behaviors. The statistical analysis shows that special zones with high degree of political authority, unified governance structure, and strong regulatory environment tend to attract more FDI, particularly more domestic market-seeking FDI, other things being equal. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]

The article discusses the impact of the 2002 Tax-For-Fee reform (TFR) in Northwest China. Since the introduction of TFR, the ability of townships to provide local services such as public health care and education has diminished because of reduced autonomy. Townships, effectively, became administrative units dependent on remittances from county governments. Meanwhile, rural incomes have increased as a result of TFR.