Decentralization and hukou reforms in China

Abstract

China is undergoing a process of decentralization that has been highly valued for its economic growth. However, this paper aims to explore how this process has affected the equality of social provision for rural–urban migrants in China by taking hukou system reform as a case study. It is argued here that the traditional assumption that decentralization promotes social welfare by bringing the government closer to the people is not necessarily true, or at least not uniformly so in certain institutional settings. Decentralization policies in contemporary China indeed make local governments more powerful and responsible for social welfare provision to their local citizens, but have also undermined the incentives for local governments to cover the welfare costs for migrant workers. To this extent, decentralization has played a negative role in integrating the large number of migrant workers into local cities and promoting equity within social welfare delivery at a national level in China.