School of Economics
Institutional Affiliation: Peking University
NBER Working Papers and Publications
|May 2019||Factions, Local Accountability, and Long-Term Development: Theory and Evidence|
with Hanming Fang, Linke Hou, Mingxing Liu, Lixin Colin Xu: w25901
We develop a theoretical model of how factional affiliation and local accountability can shape the policy choices of local officials who are concerned about political survivals, and subsequently affect the long-term local development. We provide empirical evidence in support of the theoretical predictions using county-level variations in development performance in Fujian Province in China. When the Communist armies took over Fujian Province from the Nationalist control circa 1949, communist cadres from two different army factions were assigned as county leaders. For decades the Fujian Provincial Standing Committee of the Communist Party was dominated by members from one particular faction, which we refer to as the strong faction. Counties also differed in terms of whether a local guerrilla...