Are Pilot Experiments Random? Social Connections and Policy Expansion in China
Yang, J., & Bazan Ruiz, M. I. . (2021). Are pilot experiments random? Social connections and policy expansion in China. The Journal of the Economics of Ageing, 18, 100305. https://doi.org/10.1016/J.JEOA.2020.100305
38 Pages Posted: 3 Jun 2020 Last revised: 22 Mar 2023
Date Written: May 5, 2020
Abstract
This paper provides new evidence of how political regimes and social connections determine participation in pilot experiments. Using data from China’s national pilot experiments of New Rural Pension Scheme (NRPS), we show that county-level charac- teristics and political regime have explanation power in the early stage of county pilot decision. Local party secretaries connected to Central Committee (CC) members, a po- litical body that comprises the top leaders of the Communist Party, are discouraged to enroll. In contrast, counties that are send-down movement destinations of CC members during Cultural Revolution (1966-1976) are more likely to enroll. We also find counties with lower cost, higher benefits, and more government revenue are more likely to enroll. Local government leaders may face trade-off between economic performance and social welfare, and connected officials have more incentives to allocate resources in economic growth rather than social welfare. These findings are characterized by a theoretical model that describes how connections change local leaders’ allocation of government resources under a multitask problem
Keywords: Chinese polity, rural pension, Natural experiment, Hometown ties, send-down movement
JEL Classification: C93, H11, H53, H55, P16
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