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Term limits and rotation of Chinese governors: do they matter to economic growth?

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  • Jun Zhang
  • Yuan Gao

Abstract

Since the 1980s, the economic system in China has evolved into one that combines fiscal decentralization with political centralization. Local officials are successfully motivated to foster economic growth. One of the motivation and control mechanisms established in China's political and bureaucratic hierarchy is an introduction of term limits and a rotation system for higher level government officials. Using a panel data covering detailed information for all the provincial governors between 1978 and 2004, this paper finds a positive impact of both term limits and rotation of governors across provinces on local economic growth. It also finds that term limits and economic growth exhibit a weakly inverted U relationship. Although the rotation of governors matters to local economic growth, regional variation is observed, and the positive impact of rotated governors on local growth turned out to be more obvious in the eastern provinces than in the other provinces.

Suggested Citation

  • Jun Zhang & Yuan Gao, 2008. "Term limits and rotation of Chinese governors: do they matter to economic growth?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 13(3), pages 274-297.
    • Handle: RePEc:taf:rjapxx:v:13:y:2008:i:3:p:274-297
    DOI: 10.1080/13547860802131284
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    References listed on IDEAS

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    1. Besley, Tim & Persson, Torsten & Sturm, Daniel, 2005. "Political Competition and Economic Performance: Theory and Evidence from the United States," CEPR Discussion Papers 5138, C.E.P.R. Discussion Papers.
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    Cited by:

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    2. Zhang, Yameng & Zhan, Wu & Xu, Yekun & Kumar, Vikas, 2020. "International friendship cities, regional government leaders, and outward foreign direct investment from China," Journal of Business Research, Elsevier, vol. 108(C), pages 105-118.
    3. Danqing Wang & Zhitao Zhu & Shuo Chen & Xiaowei Rose Luo, 2021. "Running out of steam? A political incentive perspective of FDI inflows in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 692-717, June.
    4. Yongze Yu & Zhe Wang & Dayong Liu & Liping Fu, 2021. "Changes in officials, total factor productivity fluctuation and government transformation: Evidence from Chinese prefecture cities," Pacific Economic Review, Wiley Blackwell, vol. 26(2), pages 283-299, May.
    5. Que, Wei & Zhang, Yabin & Schulze, Günther, 2019. "Is public spending behavior important for Chinese official promotion? Evidence from city-level," China Economic Review, Elsevier, vol. 54(C), pages 403-417.
    6. Jiancheng Lu & Xiaolong Luo & Peigang Zhang, 2019. "Rights–Values–Interests: The Conflict between World Cultural Heritage and Community: A Case Study of the West Lake Cultural Landscape Heritage in China," Sustainability, MDPI, vol. 11(17), pages 1-17, August.
    7. Guo, Yuchen & Yuan, Yu, 2022. "Assessing the energy resources policy agenda: Evidence from China's green express policy," Resources Policy, Elsevier, vol. 79(C).
    8. Li Fang & Chuanhao Tian & Xiaohong Yin & Yan Song, 2018. "Political Cycles and the Mix of Industrial and Residential Land Leasing," Sustainability, MDPI, vol. 10(9), pages 1-24, August.
    9. Sun, Sunny Li & Peng, Mike W. & Lee, Ruby P. & Tan, Weiqiang, 2015. "Institutional open access at home and outward internationalization," Journal of World Business, Elsevier, vol. 50(1), pages 234-246.
    10. Yulia Muratova & Jakob Arnoldi & Xin Chen & Joachim Scholderer, 2018. "Political rotations and cross-province firm acquisitions in China," Asian Business & Management, Palgrave Macmillan, vol. 17(1), pages 37-58, February.
    11. Alfred M Wu, 2019. "The logic of basic education provision and public goods preferences in Chinese fiscal federalism," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    12. Chen, Ting & Kung, J.K.-S., 2016. "Do land revenue windfalls create a political resource curse? Evidence from China," Journal of Development Economics, Elsevier, vol. 123(C), pages 86-106.
    13. Chen, Xiude & Qin, Quande & Wei, Y.-M., 2016. "Energy productivity and Chinese local officials’ promotions: Evidence from provincial governors," Energy Policy, Elsevier, vol. 95(C), pages 103-112.

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