Semester

Spring

Date of Graduation

2020

Document Type

Dissertation

Degree Type

PhD

College

Chambers College of Business and Economics

Department

Economics

Committee Chair

Joshua Hall

Committee Member

Roger Congleton

Committee Member

Brad Humphreys

Committee Member

Peter Boettke

Abstract

This dissertation studies the governance structure and its economic impacts in the Chinese context. Specifically, I use a public choice framework to analyze how institutions influence economic and political activities of both public officials and private sectors. Chapter 1 employs the synthetic control method to investigate the effects of institutions to regional economic development. Chongqing Municipality, a province-level region in China, had a unique leader from late 2007 to early 2012 who conducted red ideology movements and legal intervention. The empirical results reveal that although the economic policies promoted the Chongqing economy, the Maoist political policies partially undermined its economic growth in the short run. Chapter 2 analyzes the collective actions and horizontal bargaining within every political branch in contemporary China. I argue that this horizontal bargaining within the party is enhanced by the vertical bargaining. Incorporating Kornai’s work on socialism, the “party chief and mayor” template extends the bargaining model from one key figure and one group in the “king and council” template to two key figures and their respective confidants. In addition, it incorporates institutional constraints into the graphical model. It also defines a “collective decision probability function,” which shows how the party chief and mayor model reaches “checks and balances” that limit the policy space, regardless of whether the policy is exogenous or endogenous. Chapter 3 empirically tests the theory proposed in the second chapter. It investigates how economic institutions influence the “matching” degree between party chief and mayor across provinces. In the Chinese context, these city level politicians are appointed, i.e. “elected”, by the province level politicians who also face institutional constraints. Results suggest that more economic freedom in one province reduces the difference between party chief and mayor in the biographical background and career experience components. However, more economic freedom in one province increases the difference of the ideology component between party chief and mayor. The results deepen understanding of institutions’ role in the political system of authoritarian regimes.

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