Policy Analysis
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Tuesday, May 11, 2021 | 11:00am-12:15 pm Pacific Time

The Political Economy of Policy Experimentations in China

Policy learning, often involving experimentations, is an essential component of government's decision making. In this project, we aim to describe and understand China's policy experimentations, which are speculated by many to have played a vital role in fostering China's reform and growth. We collect comprehensive data on policy experimentations conducted in China over the past 4 decades by 139 ministries and commissions. In sum, our results suggest that policy experimentations take place under various political and bureaucratic constraints, which could limit the scope and bias the direction of policy learning.

Watch the Recorded Event:


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Headshot of Dr. David Yang
About the Speaker

David Yang is an Assistant Professor of Economics at Harvard University, as well as a Faculty Research Fellow at the National Bureau of Economic Research (NBER) and Global Scholar at the Canadian Institute for Advanced Research (CIFAR). His research focuses on political economy, behavioral and experimental economics, economic history, and cultural economics. In particular, David studies the forces of stability and forces of changes in authoritarian regimes, drawing lessons from historical and contemporary China.


Seminar Series Moderators:

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Headshot of Dr. Scott Rozelle

Scott Rozelle holds the Helen Farnsworth Endowed Professorship at Stanford University and is Senior Fellow in the Food Security and Environment Program and the Shorenstein Asia-Pacific Research Center, Freeman Spogli Institute (FSI) for International Studies. For the past 30 years, he has worked on the economics of poverty reduction. Currently, his work on poverty has its full focus on human capital, including issues of rural health, nutrition and education. For the past 20 year, Rozelle has been the chair of the International Advisory Board of the Center for Chinese Agricultural Policy, Chinese Academy of Sciences (CAS). In recent years Rozelle spends most of his time co-directing the Rural Education Action Project (REAP). In recognition of this work, Dr. Rozelle has received numerous honors and awards. Among them, he became a Yangtse Scholar (Changjiang Xuezhe) in Renmin University of China in 2008. In 2008 he also was awarded the Friendship Award by Premiere Wen Jiabao, the highest honor that can be bestowed on a foreigner. 

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hongbin li headshot
Hongbin Li is the James Liang Director of the China Program at the Stanford King Center on Global Development, and a Senior Fellow of Stanford Institute for Economic Policy Research (SIEPR). Hongbin obtained his Ph.D. in economics from Stanford University in 2001 and joined the economics department of the Chinese University of Hong Kong (CUHK), where he became full professor in 2007. He was also one of the two founding directors of the Institute of Economics and Finance at the CUHK. He taught at Tsinghua University in Beijing 2007-2016 and was C.V. Starr Chair Professor of Economics in the School of Economics and Management. He founded the Chinese College Student Survey (CCSS) in 2009 and the China Employer-Employee Survey (CEES) in 2014.

Hongbin’s research has been focused on the transition and development of the Chinese economy, and the evidence-based research results have been both widely covered by media outlets and well read by policy makers around the world. He is currently the co-editor of the Journal of Comparative Economics.

Zoom Meeting

Seminars
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To examine poverty on China’s campuses, we utilize the Chinese College Students Survey carried out in 2010. With poverty line defined as the college-specific expenditures a student needs to maintain the basic living standard on campus, we find that 22 percent of college students in China are living in poverty. Poverty is more severe among students from the rural or Western parts of the country. The college need-based aid program must be improved because its targeting count error is over 50 percent. Lacking other income sources, poor students rely heavily on loans and working to finance their college education.

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Publication Type
Journal Articles
Publication Date
Journal Publisher
China Quarterly
Authors
Hongbin Li
Paragraphs

This paper's findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSPs) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. The quasi-experimental empirical approach is based on China’s Huai River policy, which provided free winter heating via the provision of coal for boilers in cities north of the Huai River but denied heat to the south. Using a regression discontinuity design based on distance from the Huai River, we find that ambient concentrations of TSPs are about 184 μg/m3 [95% confidence interval (CI): 61, 307] or 55% higher in the north. Further, the results indicate that life expectancies are about 5.5 y (95% CI: 0.8, 10.2) lower in the north owing to an increased incidence of cardiorespiratory mortality. More generally, the analysis suggests that long-term exposure to an additional 100 μg/m3 of TSPs is associated with a reduction in life expectancy at birth of about 3.0 y (95% CI: 0.4, 5.6).

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Publication Type
Journal Articles
Publication Date
Journal Publisher
Proceedings of the National Academy of Sciences (PNAS)
Authors
Hongbin Li
Paragraphs

In contrast to its decentralized political economy model of the 1980s, China took a surprising turn towards recentralization in the mid-1990s. Its fiscal centralization, starting with the 1994 tax reforms, is well known, but political recentralization also has been under way to control cadres directly at township and village levels. Little-noticed measures designed to tighten administrative and fiscal regulation began to be implemented during approximately the same period in the mid-1990s. Over time these measures have succeeded in hollowing out the power of village and township cadres. The increasing reach of the central state is the direct result of explicit state policies that have taken power over economic resources that were once under the control of village and township cadres. This article examines the broad shift towards recentralization by examining the fiscal and political consequences of these policies at the village and township levels. Evidence for this shift comes from new survey data on village-level investments, administrative regulation and fiscal oversight, as well as township-level fiscal revenues, expenditures, transfers (between counties and townships) and public-goods investments.

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Publication Type
Journal Articles
Publication Date
Journal Publisher
The China Quarterly
Authors
Scott Rozelle
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When seeking to build high quality and cost-effective infrastructure in rural villages, a fundamental question is: Who is better at doing so? Should the village leadership or a government agency above the village finance and/or manage the construction of the infrastructure project? To answer this question, we surveyed all rural road projects in 101 villages in rural China between 2003 and 2007 and measured the quality and per kilometer cost of each road. According to our analysis, road quality was higher when more of the project funds came from the government agency above. Moreover, projects had lower cost per kilometer when the village leaders managed the road construction. Overall, our findings suggest that to build high quality and cost-effective rural roads village leaders and government agencies should collaborate and each specialize in a specific project role.

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Publication Type
Journal Articles
Publication Date
Journal Publisher
Journal of Development Economics
Authors
Scott Rozelle
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Abstract: The overall goal of this article is to understand the progress in implementing the New Cooperative Medical Scheme, while seeking to assess the strengths and weaknesses of the programme and, in particular, to understand its effects on the incidence of catastrophic medical payment. The study is based on two rounds of nationally representative household survey data collected in 2005 and 2008. The study found that the programme has a very high level of participation, and has increased farmers’ use of medical services. However, despite efforts by both central and local governments and high household participation, the programme is only partially achieving its policy objectives. In particular, it has been able to extend to almost all of the rural population, but has failed to cover expenses for catastrophic illness, due to insufficient funds.

 

Abstract The overall goal of this article is to understand the progress in implementing the New Cooperative

 

Medical Scheme, while seeking to assess the strengths and weaknesses of the programme and, in particular,

to understand its effects on the incidence of catastrophic medical payment. The study is based on two

rounds of nationally representative household survey data collected in 2005 and 2008. The study found that

the programme has a very high level of participation, and has increased farmers’ use of medical services.

However, despite efforts by both central and local governments and high household participation, the

programme is only partially achieving its policy objectives. In particular, it has been able to extend to almost

all of the rural population, but has failed to cover expenses for catastrophic illness, due to insufficient funds.

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Publication Type
Journal Articles
Publication Date
Journal Publisher
IDS Bulletin
Authors
Scott Rozelle
Number
4
Paragraphs

Purpose – The purpose of this paper is to describe the policy and trends in rural education in China over the past 40 years; and also discuss a number of challenges that are faced by China’s rural school system.

Design/methodology/approach – The authors use secondary data on policies and trends over the past 40 years for preschool, primary/junior high school, and high school.

Findings – The trends over the past 40 years in all areas of rural schooling have been continually upward and strong. While only a low share of rural children attended preschool in the 1980s, by 2014 more than 90 percent of rural children were attending. The biggest achievement in compulsory education is that the rise in the number of primary students that finish grade 6 and matriculate to junior high school. There also was a steep rise of those going to and completing high school. While the successes in upscaling rural education are absolutely unprecedented, there are still challenges.

Research limitations/implications – This is descriptive analysis and there is not causal link established between policies and rural schooling outcomes.

Practical implications – The authors illustrate one of the most rapid rises of rural education in history and match the achievements up with the policy efforts of the government. The authors also explore policy priorities that will be needed in the coming years to raise the quality of schooling.

Originality/value – This is the first paper that documents both the policies and the empirical trends of the success that China has created in building rural education from preschool to high school during the first 40 years of reform (1978-2018). The paper also documents – drawing on the literature and the own research – the achievements and challenges that China still face in the coming years, including issues of gender, urbanization, early childhood education and health and nutrition of students.

Keywords Trends, China, Achievements, Policies, Rural education, Shortcomings

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Publication Type
Journal Articles
Publication Date
Journal Publisher
China Agricultural Economic Review
Authors
Alexis Medina
Scott Rozelle
Number
1
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Purpose

The purpose of this paper is to describe the trends in residential solid waste collection (RSWC) services in rural China over the past decade and analyze the determinants of these services using nationally representative data.

Design/methodology/approach

The authors draw on panel data from three rounds of village-level surveys of 101 villages. The three surveys were conducted in 2005, 2008, and 2012 in five provinces. The authors used fixed-effected regression approach to analyze the determinants of these services.

Findings

The results show that in the aftermath of increased investment and policy attention at the national level, the proportion of villages providing RSWC services in rural China increased significantly from 1998 to 2011. However, half of all villages in rural China still did not provide RSWC services as of 2011. Based on econometrics analysis, the authors show that villages that are richer, more populous, and villages with more small hamlets are more likely to provide RSWC services.

Originality/value

The analyses are based on primary survey data and the first to quantify trends in waste management services in the beginning of the twentieth century. The authors believe that the results will have significant policy implications for China in its continuing quest for better waste management policy.

 

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Publication Date
Journal Publisher
China Economic Agricultural Review
Authors
Scott Rozelle
Paragraphs

Purpose: The need for a universal rural pension system has been heightened by demographic changes in rural China, including the rapid aging of the nation’s rural population and a dramatic decline in fertility. In response to these changes, China’s Government introduced the New Rural Social Pension Program (NRSPP) in 2009, a voluntary and highly subsidized pension scheme. The purpose of this paper is to assess the participation of rural farmers in the NRSPP. Furthermore, the authors examine whether the NRSPP affects the labor supply of the elderly population in China.

Design/methodology/approach

This paper uses household-level data from a sample of 2,020 households originating from a survey conducted by the authors in five provinces, 25 counties, and 101 villages in rural China. Using a probit model and conducting correlation analysis, the authors demonstrate the factors affecting the participation and the impact of NRSPP on labor supply of the rural elderly.

Findings

The results show there are several factors that are correlated with participation, such as specific policy variant in force in the respective household's province, the size of the pension payout from government, the age of sample individuals, and the value of household durable assets. Specifically, different characteristics of NRSPP policy implementation increase participation in China’s social pension program. The results suggest that the introduction of the NRSPP has not affected the labor supply of the rural elderly, in general, although it has reduced participation for the elderly who were in poor health.

Originality/value

Several previous studies have covered the NRSPP. However, all previous studies were based on case studies or just focused on a small region, and for this reason the results cannot reflect the populations and heterogeneity of rural areas. Therefore, a data set with a large sample size is used in this paper to provide anew perspective to fully understand the participation of NRSPP and its impacts on rural households. This paper will make an update contribution to the literature in the area of pension programs in China.

 

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Publication Type
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Publication Date
Journal Publisher
China Agricultural Economic Review
Authors
Scott Rozelle
Paragraphs

Abstract: China's agricultural sector faces challenges because most farms are still small scale. China's policy is to encourage the consolidation of farms and promote farms that are larger in scale. A question that arises is: Are China's farms growing? The goal of the present paper is to determine whether large farms in China have emerged or if farms remain small. To meet this goal, we systematically document the trends in the operational sizes of China's farms and measure the determinants of changes in farm size. Using a nationally representative dataset, the study shows that in 2013 China's farming sector was still mostly characterized by small-scale farms. However, at the same time, there is an emerging class of middle-sized and larger-sized farms. Most large farms are being run by households but there is a set of large farms that are company/cooperative-run. Today, farmers on larger farms are younger and better educated than the average farmer.

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Publication Type
Journal Articles
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Journal Publisher
China and World Economy
Authors
Scott Rozelle
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