Decentralization, local information, and effort substitution: Evidence from a subnational decentralization reform in China

• 成果类型: Article
• 署名作者: Chen, Sicheng; Yuan, Lingran; Wang, Weijie; Gong, Binlei
• 署名单位: Tsinghua University; Tsinghua University; Zhejiang University; Zhejiang University; University of Missouri System; University of Missouri Columbia
• 刊物名称: GOVERNANCE-AN INTERNATIONAL JOURNAL OF POLICY ADMINISTRATION AND INSTITUTIONS
• ISSN/ISSBN: 0952-1895
• DOI: 10.1111/gove.12884
• 发表日期: 2025
• 关键词: performance management; fiscal decentralization; government improve; FEDERALISM; incentives; ACCOUNTABILITY; institutions; ORGANIZATION; ENFORCEMENT; CORRUPTION

摘要

This study examines whether and how information asymmetry affects local governments' gaming behaviors in a decentralization reform. We contend that adequate access to local information by the principal is a prerequisite for mitigating effort substitution among agents. We examine the hypothesis based on a decentralization reform in China-the Integration of Agriculture-related Fiscal Transfer reform. We use the distance between pilot villages and the provincial capital as the measurement of local information. Employing a difference-in-differences design to scrutinize a unique dataset comprising 85,628 observations spanning 9199 villages from 2011 to 2020, we find that subnational decentralization with information asymmetry leads to increased effort substitution by local governments. Further analysis reveals that more abundant local information can alleviate the extent of effort substitution in reformed villages. Overall, this research highlights the importance of considering local information when designing policies to mitigate performance gaming in public goods provision and support effective subnational decentralization.