The distortionary e ects of incentives in government: Evidence from China's death ceiling program

We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of `death ceilings' that, if exceeded, would impede government o cials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal o cials experienced larger declines in accidental deaths, suggesting complementarities between incentives at di erent levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet e ects in the setting of death ceilings. JEL classi cation: D73; H75