Political hierarchy and regional economic development: Evidence from a spatial discontinuity in China

• 成果类型: Article
• 署名作者: Jia, Junxue; Liang, Xuan; Ma, Guangrong
• 署名单位: Renmin University of China
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2020.104352
• 发表日期: 2021
• 关键词: Political hierarchy; decentralization; Administrative unit proliferation; Economic growth

摘要

This study investigates the effect of political hierarchy on regional economic development using evidence from Chongqing's promotion to the level of a province in China. In 1997, the prefecture-level Chongqing city was elevated to a province-level municipality, splitting off from Sichuan province, and it consequently gained a substantial increase in decision-making power for administrative, personnel, and fiscal affairs. The border areas between Chongqing and Sichuan had similar characteristics prior to treatment, allowing us to adopt a spatial regression discontinuity approach. Examining growth in town-level light intensity from 1992-2013, we find that economic activities of Chongqing towns are parallel with Sichuan towns before treatment, but activities increase sharply immediately following Chongqing's promotion, implying an increase of 1.8 percentage-points in the annual GDP growth rate. Furthermore, we find that government officials of Chongqing have higher accountability and enact more pro-growth policies than officials of Sichuan. The results provide new evidence that empowering local governments through increased political hierarchy promotes regional development. (C) 2020 Elsevier B.V. All rights reserved.