Why has policy experimentation disappeared under President Xi Jinping’s rule? And perhaps more importantly, what are the implications for China’s governance and continued economic reform?
The recentralisation of political power in China under Xi has reduced the incentives for local officials to innovate. Changing governance techniques like ‘top-level design’ create pressure for exact implementation of centrally designed policies and increase risk levels for local officials who want to design new policies or adapt national ones.
Although these changes in governance are overall reducing local officials’ incentives to innovate, there is also variation in officials’ willingness to experiment with policy. There are three potential explanations for this variation: the reward system is not completely effective; local officials have different base preferences around policy experimentation; or competition inside a cohort is still creating incentives.
The top-down evaluation and reward system can incentivise local officials to closely follow central government directions, but it only does so for a small number of upwardly mobile officials. The complexities and nuances of the evaluation system often lead to local officials relying on each other to navigate it as well. In other words, the ability of the central government to control local officials’ decisions to experiment with policy is limited. The more influential factors are local pressures to respond to governance problems, imitating peers’ innovations and individual preferences for innovation. These factors ‘filter’ institutional changes, which results in variation at the local level.
Despite this variation in the ways that local officials respond to declining incentives, the overall reduction in innovation suggests that the central government might lose its ‘adaptable’ governance mechanism that has contributed to its past economic and political successes. Some of these ‘innovations’ were, of course, just prestige projects or corruption disguised to look like innovation (so-called ‘face innovation’). Still, the lack of flexibility and responsiveness developing at the local level will negatively impact Chinese governance. Any improvements in governance through the reduction of face innovation and corruption will be offset by a lack of local responsiveness to citizen concerns and an inability to adapt policies to local conditions.
While there have been past attempts to recentralise power and temporarily halt local experimentation, these were usually followed by a period of decentralisation that ushered in more economic reform and growth. This means that the impact that the prevailing centralisation trend will have on the future of Chinese governance depends on whether this trend is a long-term one. Because recentralisation under Xi is being accompanied by a shift in governance, it seems that it is.
In these past attempts at power centralisation, the Party used financial or bureaucratic recentralisation techniques. These are still being employed now — with super-ministries and shifting rules on local debt — but this period seems to be a more extreme case of centralisation, with the power shifting from all sectors back to the Party.
What’s more, while the Party’s degree of power is similar to previous eras, leaders have historically lacked functional ways to harness this power, instead resorting to more indirect measures. Under Xi, recentralisation mechanisms such as Party leading groups and top-level design reduce fragmentation in the system, and campaigns like anti-corruption and Party discipline reduce local discretion.
The (re)creation of this central power infrastructure provides a functional mechanism through which the Party can exercise its power across China. This means that the need for governance partners or informal governance mechanisms is disappearing. The focus is moving away from local innovation and towards exact implementation of centrally designed policies.
If these governance trends continue, it can be expected that policy will be increasingly centralised, resulting in less local tinkering and more central design. Reducing local discretion also closes off policy access channels for civil society groups, another important mechanism of governance responsiveness. These groups will need to form close alliances with government agencies to provide services, or rebrand themselves as social enterprises to continue to participate in policymaking or implementation.
Many local officials still hope to practice the more grassroots governance techniques that have proven successful in creating a responsive system, including policy experimentation and partnering with civil society organisations. If centralisation trends reverse and the current risk of this type of local governance is reduced, they may reappear.
Jessica Teets is Associate Professor in the Political Science Department, Middlebury College and Non-Resident Senior Fellow at China Policy Institute.
There are several different issues here.
There have been a big debate on policy pilots in China which has lasted for several years until this day.
1. Whether pilot is indeed a bottom up approach. Pilots, despite of their merits, have been criticised by many people in China because pilots comes with money, higher level government endorsement and performance indicators for local government officials. The local government officials would want to do it because it can benefit them. Therefore it is not about bottom up, it is intermediate level echoing the top. Pilots can be done at provincial, city and district levels.
2. Should pilot be an honour? Social scientists, particularly those focused on evidence based policy, often did not like the way pilots were done. There were no proper assessment of the actual outcomes of pilots. They wanted pilots to be properly designed social experiments and evaluate. However, when everyone is doing some sort of pilots, it is impossible to tell whether a policy actual works.
3. Pilots are usually about multiple variations of one policy, when a “successful” is rolled out to the country or getting legalised, the unsuccessful pilots are stuck. Are they going to reverse everything they have done? Or just stay put? What if stay-put means breaking the law? Should the law be enforced? In the past the practice was there is no unsuccessful pilots. But this also created a lot of confusion and anxiety.
4. Grassroots decision making experiments are still on-going. It has been used in many community level experiments.
In all, there are indeed less local discretion than before and it would be good to have more discretion. However, the past practice of using pilots as an honour was heavily criticised. Therefore, the question probably need to be about whether local discretion should be granted through pilots, or through other regular channels.