[Show abstract][Hide abstract] ABSTRACT: This paper analyzes the recent fiscal crisis among villages in the city of Dongguan. The city has been an exemplar of export-oriented growth in China. Rapid economic development has been attributed to local state entrepreneurial governance based on a close relationship between the local state and enterprises. However, this development approach has led to a severe fiscal crisis, especially at the village level, due to declining rental incomes, ineffective village governance and a heavy burden of public service expenditure following the global financial crisis. This paper examines the configuration of local governance and how an economic crisis has evolved into a public finance crisis in the city. Until now the limits of entrepreneurial governance have been understood only with regard to negative social impacts. This paper reveals the limits of a developmental approach.
[Show abstract][Hide abstract] ABSTRACT: The aim of this paper is to investigate under which conditions non-democratic political regimes are capable of making credible commitments to maintain a certain level of local autonomy and to incentivize local bureaucrats. For this purpose, we compare two big non-democratic countries—Russia and China. While China has managed to establish a relatively stable system, with substantial decision-making rights resting with sub-national governments, in Russia relations between the center and the regions have been highly unstable and driven primarily by the extent to which central elites consolidated their power. We argue that China has been able to make credible commitments because its non-democratic rule is based on competition between vertical elite networks that span regional and central political arenas, and because the country has limited access to natural resources: these two characteristics explain the difference between the two cases we investigate.
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