The digitalization and evolution of China's vertical governance model

The role of the provincial government has been underscored in China’s digitalization. Digitalization strengthens the provincial government’s information ability for principal-agent control in the decentralized model and enables the provincial government to achieve effective disciplinary control. Additionally, the provincial government’s decision-making power is expanding, as a growing number of works in digitalization appeal directly to the provincial level. While the first two mechanisms consolidate the provincial government’s authority without requiring any significant structural adjustment, the third mechanism turns the provincial government from a top designer into an actor and brings about fundamental organizational change within sub-national governance. The evidence points to the conclusion that the de facto managerial level of local governance is moving up to the provincial level with regard to digitalization. This study advances the current discussion on China’s central-local relations by presenting a systematic, nuanced picture of how digitalization is restructuring China’s vertical governance model.