Policy Experimentation in China: the Political Economy of Policy Learning / Shaoda Wang, David Y. Yang.

Format:

Book

Author/Creator:

Wang, Shaoda.

Contributor:

National Bureau of Economic Research.

Yang, David Y.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29402.

NBER working paper series no. w29402

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

Many governments have engaged in policy experimentation in various forms to resolve uncertainty and facilitate learning. However, little is understood about the characteristics of policy experimentation, and how the structure of experimentation may affect policy learning and policy outcomes. We aim to describe and understand China's policy experimentation since 1980, among the largest and most systematic in recent history. We collect comprehensive data on policy experimentation conducted in China over the past four decades. We find three main results. First, more than 80% of the experiments exhibit positive sample selection in terms of a locality's economic development, and much of this can be attributed to misaligned incentives across political hierarchies. Second, local politicians allocate more resources to ensure the experiments' success, and such effort is not replicable when policies roll out to the entire country. Third, the presence of sample selection and strategic effort is not fully accounted for by the central government, thus affecting policy learning and distorting national policies originating from the experimentation. Taken together, these results suggest that while China's bureaucratic and institutional conditions make policy experimentation at such scale possible, the complex political environments can also limit the scope and bias the direction of policy learning.

Notes:

Print version record

October 2021.