Job Market Paper
"Merit-based Recruitment and Government Performance: Evidence from Random Assignment of Administrators" (with Xiaoming Zhang) [Draft]
Abstract: How to recruit managers is a central question for public sector organizations. Exploiting a unique random assignment of administrators to counties in imperial China, we study how merit-based recruitment of managers affects government performance in multiple tasks. Combining personnel records and administrative archival data, we find that merit-recruited administrators through civil service exams (as opposed to other non-merit-based recruitment) performed better in public goods provision and tax collection, and were more likely to be recognized for their achievements by the local public. Evidence suggests that these administrators were associated with better management of subordinates. Examining their dual role as judges, we use criminal case data to show that cases judged by merit-recruited administrators had shorter durations, indicating enhanced judicial efficiency. Finally, merit-recruited administrators were less likely to come from elite families and have connections to incumbent top officials. Our results highlight the importance of competitive and open recruitment as a cornerstone of effective public organizations.
Abstract: How to recruit managers is a central question for public sector organizations. Exploiting a unique random assignment of administrators to counties in imperial China, we study how merit-based recruitment of managers affects government performance in multiple tasks. Combining personnel records and administrative archival data, we find that merit-recruited administrators through civil service exams (as opposed to other non-merit-based recruitment) performed better in public goods provision and tax collection, and were more likely to be recognized for their achievements by the local public. Evidence suggests that these administrators were associated with better management of subordinates. Examining their dual role as judges, we use criminal case data to show that cases judged by merit-recruited administrators had shorter durations, indicating enhanced judicial efficiency. Finally, merit-recruited administrators were less likely to come from elite families and have connections to incumbent top officials. Our results highlight the importance of competitive and open recruitment as a cornerstone of effective public organizations.
Publications
"The Making of Bad Gentry: The Abolition of Keju, Local Governance and Anti-elite Protests, 1902-1911" (with Yu Hao, Xi Weng, and Li-An Zhou)
Journal of Economic History. 2022, 82(3), 625–661. [Journal article] [SSRN]
"Evading by All Means: VAT Enforcement and Payroll Tax Evasion in China" (with Lixing Li, Zhuo Nie, and Tianyang Xi)
Journal of Economic Behavior & Organization, 2021, 185: 770-784. [Journal article]
"Taxation, Fiscal Capacity and Credible Commitment in Eighteenth-century China: The Effects of The Formalization and Centralization of Informal Surtaxes" (with Yu Hao)
Economic History Review. 2020, 73(4): 914–939. [Journal article]
Journal of Economic History. 2022, 82(3), 625–661. [Journal article] [SSRN]
"Evading by All Means: VAT Enforcement and Payroll Tax Evasion in China" (with Lixing Li, Zhuo Nie, and Tianyang Xi)
Journal of Economic Behavior & Organization, 2021, 185: 770-784. [Journal article]
"Taxation, Fiscal Capacity and Credible Commitment in Eighteenth-century China: The Effects of The Formalization and Centralization of Informal Surtaxes" (with Yu Hao)
Economic History Review. 2020, 73(4): 914–939. [Journal article]
Working Papers
"Discretion, Talent Allocation, and Governance Performance: Evidence from China’s Imperial Bureaucracy" (with Xiaoming Zhang)
Revise and Resubmit, Journal of Development Economics. [Draft]
Abstract: Public organizations are often characterized by rigid rules and procedures. Can discretion in personnel decisions improve governance performance? We study how discretion in internal appointments affects the functioning of public organizations, exploiting an organizational reform in China’s imperial bureaucracy that modified the appointments of certain governorships from a rule-based process to a more discretionary method. We find that discretionary appointments improved public goods provision and led to greater state responsiveness. A better selection of governors plays an important mechanism: (1) discretion increased observable officer quality measured by experiences and civil exam qualifications; (2) exploiting the quasi-random rotations of governors to prefectures, we show that selected governors performed better than those unselected. We also find evidence consistent with the incentive effect. Finally, we provide evidence suggesting that the benefit of discretion depends on the incentive alignment of decision-makers with the organization.
"Top-down Monitoring or Top-down Encroachment? How Centralization Undermined Fiscal Capacity in China" (with Yu Hao)
Abstract: A common feature of low-capacity states is informal and fragmented local fiscal systems outside budgetary oversight. Centralized fiscal administration is considered important for building an effective fiscal state. However, centralizing fiscal authority may create scope for top-down encroachment between vertical levels of government and lead to negative unintended consequences. This paper studies how a centralization policy aimed at monitoring local taxation affected fiscal capacity in imperial China. We exploit predetermined variation across counties in exposure to centralization that replaced local governments’ unsupervised autonomy in local revenues with transfers from provincial governments. Using newly collected administrative data on tax collection records, we find that centralization undermined fiscal capacity, evidenced by a large increase in tax revenue deficits. Evidence suggests that counties bypassed regulation by manipulating disaster reporting and requesting tax exemption. We provide evidence consistent with the mechanism of provincial encroachment on local revenues, which undermined the fiscal conditions of counties, thereby impairing administrative capacity or forcing them to embezzle central tax to maintain local expenditure.
Revise and Resubmit, Journal of Development Economics. [Draft]
Abstract: Public organizations are often characterized by rigid rules and procedures. Can discretion in personnel decisions improve governance performance? We study how discretion in internal appointments affects the functioning of public organizations, exploiting an organizational reform in China’s imperial bureaucracy that modified the appointments of certain governorships from a rule-based process to a more discretionary method. We find that discretionary appointments improved public goods provision and led to greater state responsiveness. A better selection of governors plays an important mechanism: (1) discretion increased observable officer quality measured by experiences and civil exam qualifications; (2) exploiting the quasi-random rotations of governors to prefectures, we show that selected governors performed better than those unselected. We also find evidence consistent with the incentive effect. Finally, we provide evidence suggesting that the benefit of discretion depends on the incentive alignment of decision-makers with the organization.
"Top-down Monitoring or Top-down Encroachment? How Centralization Undermined Fiscal Capacity in China" (with Yu Hao)
Abstract: A common feature of low-capacity states is informal and fragmented local fiscal systems outside budgetary oversight. Centralized fiscal administration is considered important for building an effective fiscal state. However, centralizing fiscal authority may create scope for top-down encroachment between vertical levels of government and lead to negative unintended consequences. This paper studies how a centralization policy aimed at monitoring local taxation affected fiscal capacity in imperial China. We exploit predetermined variation across counties in exposure to centralization that replaced local governments’ unsupervised autonomy in local revenues with transfers from provincial governments. Using newly collected administrative data on tax collection records, we find that centralization undermined fiscal capacity, evidenced by a large increase in tax revenue deficits. Evidence suggests that counties bypassed regulation by manipulating disaster reporting and requesting tax exemption. We provide evidence consistent with the mechanism of provincial encroachment on local revenues, which undermined the fiscal conditions of counties, thereby impairing administrative capacity or forcing them to embezzle central tax to maintain local expenditure.
Research in Progress:
"Rural Immigration, Skill Complementarity, and the Mobility of Talent: Evidence from China" (with Ruilin Cheng, Zhencen Liu, and Zhuo Nie)
"Firm-Politician Nexus and Countercyclical Public Finance: Evidence from Municipal Land Sales" (with Jinghong Li, Zhuo Nie, and Jiaqi Zhao)
"The Social Costs of Urban Expansion in China" (with Yatang Lin and Jin Wang)
"The Fiscal Consequences of Internal Immigration" (with Zhencen Liu and Zhuo Nie)
"Firm-Politician Nexus and Countercyclical Public Finance: Evidence from Municipal Land Sales" (with Jinghong Li, Zhuo Nie, and Jiaqi Zhao)
"The Social Costs of Urban Expansion in China" (with Yatang Lin and Jin Wang)
"The Fiscal Consequences of Internal Immigration" (with Zhencen Liu and Zhuo Nie)