EAST ASIA WORKSHOP: POLITICS, ECONOMY & SOCIETY Presents
“The Last Strike: Evaluating the Distortionary Effect of Career Incentives on Taxation in China”
Department of Political Science, University of Chicago
Oct. 7th, Mon 4:30-6:00 pm
Tea Room, Social Science Research Building (2nd floor).
Refreshment will be provided
This paper analyzes the distortionary effect of political career incentives on fiscal extraction. We argue that competitive promotion tournaments distort public officials’ career incentives, leading to excessive tax extraction efforts. We empirically estimate the magnitude of distortion by exploiting two institutional designs for political selection in China: the age threshold for promotion and regulated term limits. We find that a promotion tournament becomes more intense when prefectural party leaders enter their last promotion-eligible term (at 50-55 years old). Given fierce competition for career advancement, prefectural party leaders extract excessive fiscal revenue to demonstrate their competence, but they do not enhance economic performance or redistribution efforts.
Zeyang Yu is a third year PhD student at political science department. His research interests lie broadly in causal inference and their applications in empirical political economy.
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The East Asia Workshop is sponsored by the Council on Advanced Studies in Humanities and Social Sciences.