Bureaucrats, Tournament Competition, and Performance Manipulation: Evidence from Chinese Cities

Gang Xu, L. Colin Xu and Ruichao Si
Authors registered in the RePEc Author Service: Lixin Colin Xu

No 9938, Policy Research Working Paper Series from The World Bank

Abstract: Tournament competition is viewed as motivating bureaucrats in promoting growth. This paper examines how this incentive leads to economic performance manipulation. Using data from Chinese cities, the analysis shows that performance exaggeration increases over the course of the first term of the top bureaucrat, peaking in the last year of his or her term. Winning a tournament competition is behind this performance manipulation: political rivals reinforce each other in exaggerating performance, and political competition intensifies the tendency for manipulation. Performance exaggeration leads to higher chances of promotion, but the ratchet effect (that is, better performance today leading to a higher target tomorrow) and the potential to blame predecessors induce restraint. A good local institutional environment also restrains performance manipulation.

Keywords: Labor Markets; Economic Growth; Industrial Economics; Economic Theory & Research; Regional Economic Development; Economic Development; Spatial and Local Economic Development; Subnational Economic Development; Gender and Development; Energy Policies & Economics (search for similar items in EconPapers)
Date: 2022-02-15
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:9938

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