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01-03-2018

Logrolling under fragmented authoritarianism: theory and evidence from China

Authors: Mario Gilli, Yuan Li, Jiwei Qian

Published in: Public Choice | Issue 1-2/2018

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Abstract

This paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non-democratic political system. In particular, we focus on China, where bureaucratic interest groups are separate vertical organizations reaching down from Beijing to the provinces and cities. The key question in this paper is: what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies? We address this question both theoretically and empirically. The theory predicts a specific distortion in resource allocation because of logrolling, while the empirical results confirm the theoretical prediction. We find policy outcomes under logrolling are characterized by excessive spending on all the interest groups’ preferred goods and insufficient spending on public goods. We test the existence of logrolling between the Ministry of Civil Affairs and Ministry of Health in China. Our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies.

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The threshold of 20% is chosen because the mean of economic losses as a share of fiscal revenue is 20%.

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Title: Logrolling under fragmented authoritarianism: theory and evidence from China
Authors: Mario Gilli
Yuan Li
Jiwei Qian
Publication date: 01-03-2018
Publisher: Springer US
Published in: Public Choice / Issue 1-2/2018
Print ISSN: 0048-5829
Electronic ISSN: 1573-7101
DOI: https://doi.org/10.1007/s11127-018-0526-4

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