Governing Economic Openness: Provincial Level Evidence

Prevailing economic theories and preliminary empirical evidence suggest that growing world market integration unleashes centrifugal forces among subnational territorial units and undermines domestic central political authority. Reversing the conventional demand-side bottom-up approach, this paper turns to the supply side by examining the incentives of and resources available for national-level political actors. Through a cross-section time-series dataset on China’s top provincial leadership, combined with annual economic data from provincial statistical sources for 1977-2002, it shows that the Chinese political Center has manipulated its personnel monopoly power to strengthen control over provincial Party Secretaries in provinces that engage in more foreign trade, especially export. Political control, however, seems to have weakened over Governors overseeing provinces more exposed to the world market, perhaps for good reasons in a system where the ruling Party still dominates. Our findings have implications for the broader political economy literature on economic openness, political institutions and intergovernmental conflicts. ∗ Department of Political Science, Yale University, New Haven, CT 06520, email: [email protected]. Financial support from the East Asian Studies Council, the Globalization and Self-Determination Project, the Leitner Political Economy Program (all at the Yale Center for International and Area Studies), and the Yale Graduate School is gratefully acknowledged. Pierre-Francois Landry generously shared with me much of the economic and political data used in this study. Assistance from the staff and Jean Hung of the Universities Service Centre for China Studies at the Chinese University of Hong Kong, Richard Horn of the Yale Social Science Libraries, staff of the Perkins Library at Duke University, and Ying Zhang has been indispensable. For very helpful comments and discussions, I am grateful to José Antonio Cheibub, Mary C. Cooper, Yasheng Huang, Gustav Ranis, T. Paul Schultz, and especially Pierre-Francois Landry, Susan Rose-Ackerman, and Frances M. Rosenbluth. I also thank Donald Green, Kenneth Scheve, Yixiao Sun and Jeroen Wessie for various methodological advice. All the remaining errors are mine alone.