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Political hierarchy and urban primacy: Evidence from China

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  • Bo, Shiyu
  • Cheng, Chao

Abstract

This paper studies the distributional effects of a centralisation reform of China’s political hierarchy on regional urbanisation. Initiated in 1983, the reform, implemented over a 20-year period, transferred the decision-making powers of county-level governments to prefecture-level governments. We use a difference-in-differences approach to evaluate the heterogeneous urbanisation of counties in response to this centralisation reform. The distributional effects include greater urban primacy and a more marked core–periphery structure at the prefecture level. Further analyses reveal that the results are driven by the reallocation of fiscal resources and industrial production based on both productivity advantages and political favouritism.

Suggested Citation

  • Bo, Shiyu & Cheng, Chao, 2021. "Political hierarchy and urban primacy: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 933-946.
    • Handle: RePEc:eee:jcecon:v:49:y:2021:i:4:p:933-946
    DOI: 10.1016/j.jce.2021.05.001
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    More about this item

    Keywords

    Centralisation; Political hierarchy; Distributional effect; Urban primacy; Core–periphery structure;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

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