Incentivized Inequality: Career Incentives and Investment allocation in China
To whom politicians allocate government resources is one of the central themes in distributive politics. While there is a large body of literature on the matter in democratic societies, the knowledge on authoritarian regimes is still limited. By using China as a testing ground, the world’s largest authoritarian regime, this research examines the distributive mechanisms of authoritarian leaders from the perspective of sub-national officials. This paper argues that the career incentives of provincial leaders in China play decisive roles in whether the provincial government allocates resources to richer or poorer sub-regions. With a unique dataset of provincial standing committee members from 1994 to 2014, this paper measures each provincial leader’s career prospect as a predicted probability of political advancement. In the analysis, if a provincial leader’s relative career prospect, compared to rivals, is not high enough to secure the next promotion or not too low to be disqualified, the leader is designated as a career-incentivized leader. The leader has a strong incentive to allocate resources to richer sub-regions in order to maximize the promotion probability. The empirical results demonstrate that Chinese provincial governments dominated by such career-incentivized officials were likely to promote more investment but aggravate intra-provincial inequality by channeling the investment to richer and more developed sub-regions. The motivation behind this choice is that career-incentivized leaders in the provincial leadership are concerned with impressing their political patrons in the center by engaging in rent-seeking activities.