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The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program

Raymond Fisman and Yongxiang Wang

No 23098, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of ‘death ceilings’ that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings.

JEL-codes: D73 H75 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pol and nep-tra
Date: 2017-01
Note: DEV LE POL
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Published as Raymond Fisman & Yongxiang Wang, 2017. "The Distortionary Effects of Incentives in Government: Evidence from China's "Death Ceiling" Program," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 202-218, April.

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