Research on Public Goods Provision of Local Governments in China: Informal System as a Perspective
In the existing literature on the study of the behaviour of local governments in transitional China, increasing attention has been paid to the incentive and constraint effects of formal institutions on the behaviour of officials. The relative performance appraisal system based on GDP is a determining factor in China's economic success after the reform and opening up, and at the same time, it is also an important reason why local governments neglect the supply of public goods. Even after taking into account formal institutions and socioeconomic factors, this study still observes significant regional and temporal differences in the level of public goods provision by local governments. However, the determinants behind this difference have not been adequately examined in the existing literature. This book argues that informal institutions are the cause of this difference. By using the regional leader's hometown as a proxy for informal institutions and using data from prefecture-level cities in China from 1990 to 2010, this study systematically tests the above hypothesis.
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