Institutions of the Party-State

Major debate about the capacity of the Chinese state Where does Pei Minxin stand?

Alternative argument: Yang Dali +

Institutions of the Party-State

Major debate about the capacity of the Chinese state Where does Pei Minxin stand? Alternative argument: Yang Dali*

China has made significant institutional reforms to improve governance

Critique: strong on policy; weak on implementation

*Remaking the Chinese Leviathan Now let’s look at some empirical

evidence to assess the relative merits of each side in the debate.

Institutions of the party-state

Fiscal Policy Background:1994 tax and fiscal reforms Established National Tax Service (collects central

and shared taxes under Tax Sharing System) historic! Budgetary revenue as share of GDP

1994 10.8 percent 2005 17.3 percent

Centralized control over fiscal revenue Center’s share of budgetary revenue

1993 22 percent Since 1994 > 50 percent

Continued decentralized expenditure responsibility Revenue squeeze on local governments

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Central + provincial shares of total revenue and expenditures (%)

1993 2003Revenue 35 66

(+31)Expenditure 45 49

(+ 4)

Source: Wong 2006

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Fiscal Policy Background

Further centralized control over fiscal revenue 2002 reassigned corporate and individual

income taxes from local to shared category with center taking 60 percent

Abolished agriculture taxes burdensome on low-income farmers After 2002

No Ag Special Products Tax No Slaughter Tax

After 2004 No Agriculture Tax

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Fiscal Policy Background

Why is central fiscal capacity important? Is Dali Yang’s optimism justified?

p.44

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Institutions of the party-state Implications of fiscal policy: fiscal gap

40-45 percent covered by local and shared taxes 40-50 percent of fiscal needs covered by

intergovernmental fiscal transfers 5-10 percent of fiscal needs unmet (Wang

Yongjun estimate 2006). High degree of dependence on fiscal transfers

Central gov. sends resources to poorer areas Reliance on off-budget funds and local gov.

debt Exacerbated by political pressures

Tenure, promotion criteria

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Institutions of the party-state Using law to govern (Dali Yang’s

argument) Under Mao, used ideology more than law During reform era, new role for law

Bring regularity to government operations Indicate policy direction Supervise/regulate functioning of state agencies

Key institutions for ruling by law People’s Congresses Courts

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Institutions of the party-state Hierarchy of authoritative documents Enactments with the formal status of law —in the sense of being enforceable by courts

Constitution xianfa 宪法 National People’s Congress & Standing

Committee statutes/laws falü 法律 State Council administrative regulations xingzheng fagui 行政

法规 Provincial-level people’s congresses local regulations difangxing fagui 地方性法规

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Institutions of the party-state Problems with the hierarchy of

authoritative doc’s No good system for authoritatively resolving

conflicts between different rules Technically,

Constitution Law on Legislation

National People’s Congress Standing Committee May review and invalidate legislation passed by lower-

level bodies NPC not known to have overturned a single

administrative or local regulation (Chen 2004:114)

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Institutions of the party-state Problems with the hierarchy of

authoritative doc’s Courts

Not allowed to play role of resolving conflicts of law/rules Not allowed to invalidate legislation Can only either appeal to higher legislative body or

apply lower-level rule Regulations passed by lower-level governments

often trump superior regulations In practice, local governments dominate Administrative Litigation Law

In principle, citizens can sue in court to force governments to follow only laws already on the books land ex.

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Institutions of the party-state Courts beholden to local party-state

No tenure for judges Local government controls funding Local party committee and party political-

legal committee ( 政法委员会 ) Have influence over

Court personnel (technically People’s Congress authority over

personnel) Acceptance of cases Handling of cases

Chen Guangcheng, “blind lawyer” Sought to enforce

“2002 Population and Family Planning Law” “Family planning shall

be practiced chiefly by means of contraception” Article 19

“informed choice” Led lawsuit by rural

residents of Linyi against local government practices Sterilization Forced abortion

Chen Guangcheng, “blind lawyer” Beijing University Law

Professor, Zhan Zhongle, who helped draft the “2002 Population and Family Planning Law” re: Chen’s challenge “By suing the government,

Linyi peasants are merely asserting their legal rights. Whether the courts accept the case, and how they handle it, will be a test of China’s Justice system and of whether China can govern according to law.” (Source: Washington Post, 8/27/05)

Institutions of the party-state Local People’s Congresses

In principle, new supervisory role over local governments (Dali Yang, p. 49)

Must approve work report of government Must appraise local official’s performance Must approve local government budget

In practice, very limited Lack authority to actually punish local governments Only party performance appraisal matters Party group steers People’s Congress Standing

Committee PC lacks adequate data or staff to meaningfully

supervise budget

Institutions of the party-state Local People’s Congresses

Examples of real attempts at supervision (reflects what PC deputies hear from local

citizens) Hubei, Shiyan PC vetoed work report of government

to highlight misappropriation of poverty relief funds Hubei, Wuhan PC vetoed work report of

government to highlight poor implementation of employment re-training project for laid-off workers

What really happens Governments ignore PC signal sent to higher level party apparatus—it

then can choose whether to take action

Institutions of the party-state17

Questions for discussion: To whom are local cadres accountable? What aspects of the system promote

effective policy implementation? What are the structural obstacles to

effective governance?

Questions for discussion

Why has the passage of significant environmental legislation and the building of an extensive environmental regulatory framework not led to improved policy implementation or reduced environmental degradation?

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