From “decentralization of governance” to “governance of decentralization”: Reassessing income inequality in periurban China

Siu Wai Wong,Jinlong Liu,Winky K.O Ho,Bo-Sin Tang,Ming Liang

doi:10.1177/0308518x20988013

Abstract

Grassroots village organizations are crucial for understanding the interplay between the decentralization of state power and growing income inequality in periurban China. Based on a study of 380 shareholding cooperatives and 43 administrative villages in Guangdong, we examine how state policy has interacted with village institutions to determine the management and distribution of collective income among villagers. Our findings suggest that the decentralization of power over collective asset management and distribution to these grassroots organizations did not cause a retreat in the state’s capacity for strategic intervention and local regulatory controls. Rather, the state made continued attempts to regain power over village governance through institutional formalization. Such interventions enhanced the access of villagers to state welfare. However, they worsened income disparities among villagers by undermining the village redistributive mechanism based on informal rules.

Highlights

Significant economic disparities between different regions of China have placed the relationship between governance decentralization and state restructuring at the forefront of scholarly debates
Our analysis focuses on three questions: (1) How have income disparities been fostered under the institution of shareholding cooperative (SC)? (2) How are income disparities associated with the governance fragmentation caused by the decentralization of collective asset management? (3) Why did the emerging governance fragmentation not result in a decline in state power in regional governance?
When the local state strengthens its financial input into the central provision of better social welfare services and urban infrastructures, it should leave more autonomy to villages in the management and distribution of collective assets

Summary

Introduction

Significant economic disparities between different regions of China have placed the relationship between governance decentralization and state restructuring at the forefront of scholarly debates. It has often been argued that decentralization has worsened regional disparities and income inequality (Chan and Buckingham, 2008; Croll, 1999; Khan et al, 1993; Kim, 2010; Lyons, 1991; Tsui, 1993; Whalley and Yue, 2009). Decentralization has created significant economic disparities among regions and cities and deepened the division between poor and rich villages (Bach, 2010; Rozelle, 1994). The fragmentation of local governance has inevitably undermined the power of the state to pursue economies of scale in providing public welfare and infrastructure, leading to rising inequality, as evidenced by income segregation and poverty concentration (Lampton, 1987; Lieberthal, 1992; Tomba, 2018)

Objectives

Findings

Conclusion