IDEAS home Printed from https://ideas.repec.org/a/eee/poleco/v84y2024ics0176268023000411.html
   My bibliography  Save this article

Pro-growth inefficiency: Rents and moral hazard in infrastructure contests in China

Author

Listed:
  • Liu, Qijun
  • Huang, Xin

Abstract

We study contests for promotion of local government leaders orchestrated by the central government in China. The contests rewarded regional economic success. The probability of promotion increased with regional infrastructure investment but we find negative returns from infrastructure. We find feedback between corruption and investment in infrastructure. There was moral hazard – successful local government leaders who were promoted to higher level positions in the government and Party hierarchical structure left behind regional local governments mired in debt or bankruptcy because of debt financing of infrastructure investment that was used to win the center-orchestrated contests. Our study makes a contribution to contest theory by providing an empirical study for rent-seeking contests.

Suggested Citation

  • Liu, Qijun & Huang, Xin, 2024. "Pro-growth inefficiency: Rents and moral hazard in infrastructure contests in China," European Journal of Political Economy, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:poleco:v:84:y:2024:i:c:s0176268023000411
    DOI: 10.1016/j.ejpoleco.2023.102397
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0176268023000411
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejpoleco.2023.102397?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Infrastructure investment; Rent seeking; Moral hazard; Bureaucratic politicized promotion; Corruption; China;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:84:y:2024:i:c:s0176268023000411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505544 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.