Laboratories of Autocracy: Landscape of Central–Local Dynamics in China’s Policy Universe

Kaicheng Luo, Shaoda Wang and David Yang

No 34219, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a comprehensive collection of 3.7 million Chinese policy documents and government work reports spanning the past two decades, we identify 115,679 distinct policies and systematically trace their initiation and diffusion. Our analysis reveals three key findings. First, China’s policymaking has historically been highly decentralized, with local bureaucrats playing crucial roles in both creating new policies and spreading them. Second, since 2013, policymaking has become substantially more centralized, driven primarily by changing bureaucratic incentives—bottom-up innovation is no longer rewarded, while strict enforcement of central policies is. Third, our examination of industrial policies shows that centralization affects both policy suitability and effectiveness. Top-down industrial policies tend to align poorly with local conditions and are less effective at driving industrial growth, highlighting centralization’s costs. On the other hand, under decentralization, competition among local officials can distort policy diffusion, also undermining effectiveness. Our quantitative assessment of both distortions indicates that economic costs of centralizing policymaking in China have significantly outweighed its benefits.

JEL-codes: H70 O2 P52 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-cna
Note: DEV PE POL
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