AN ECONOMIC ANALYSIS OF THE POLITICAL PROMOTION SYSTEM IN CHINA

Abstract

This paper mainly discusses the political promotion system in China. Specifically, we develop a generalized analytical framework by introducing the contest success function. On the one hand, the central government can give the optimal political promotion benefits to local officials to incentivize them to exert desirable developmental efforts. On the other hand, the central government can undertake a further design of the political promotion system to motivate local officials via its assigned incentive strengths to the corresponding group and other groups, or via its stipulated number of comparable regions in the corresponding group. Our main findings in terms of the local official’s assigned weight to the political benefit are as follows. First, the individual developmental effort and the summed developmental efforts are increasing in the local official’s assigned weight to the political benefit. Second, the central government’s assigned incentive strength to other groups is increasing in the local official’s assigned weight to the political benefit. Third, the central government’s assigned incentive strength to the corresponding group is decreasing in the local official’s assigned weight to the political benefit. Fourth, the number of comparable regions in the corresponding group is decreasing in the local official’s assigned weight to the political benefit.