Books
China’s economy, as a whole, has developed rapidly over the past 35 years, and yet its richest county is over 100 times richer in per capita terms than its poorest county. To explain this vast variation in development, David J. Bulman investigates the political foundations of local economic growth in China, focusing on the institutional and economic roles of county-level leaders and the career incentives that shape their behaviour. Through a close examination of six counties complemented by unique nation-wide data, he presents and explores two related questions: what is the role of County Party Secretaries in determining local governance and growth outcomes? And why do County Party Secretaries emphasize particular developmental priorities? Suitable for scholars of political economy, development economics, and comparative politics, this original study analyzes the relationship between political institutions, local governance, and leadership roles within Chinese government to explain the growing divergence in economic development between counties.
Peer-reviewed articles and book chapters
“Instinctive Commercial Peace Theorists? Interpreting American Views of the US-China Trade War,” Business & Politics 24(4) (2022): 430-462.
Existing theories of individual trade preferences do not satisfactorily explain how security concerns should affect American support for the US–China trade war that began in 2018. Although existing theories of public attitudes toward international trade—economic self-interest, sociotropism, partisanship, reciprocity, and xenophobia—all help to explain initial support for the trade war, these hypotheses do not adequately explain citizen attitudes in the context of an increasingly adversarial and securitized bilateral US–China relationship. In particular, they do not address how rising security tensions affect trade preferences. Using nationally representative original survey data (n = 1,016) and a nonrepresentative survey with an embedded experiment (n = 1,015), this article argues that securitization of the bilateral economic relationship has spurred threat perceptions and given rise to a Cold War narrative that has in turn caused a substantial share of Americans to become less concerned with the economic outcomes of trade and more concerned with trade’s effect on security. These Americans demonstrate an instinctive “commercial peace” response, seeing trade liberalization as a potential deterrent to conflict. The results challenge conventional wisdom on political support for the trade war and add depth to existing theories of individual trade preferences regarding the interaction between economic, security, and psychological motivations.
“Picking Losers: How Career Incentives Undermine Industrial Policy in Chinese Cities” (with Xun Yan and Qiong Zhang) Journal of Development Studies 58(6) (2022): 1102-1123.
Sustained rapid economic growth in China in the context of considerable market intervention has led to renewed interest in the efficacy of industrial policy. Have industrial policies helped firms overcome market failures and boosted productivity, or have they distorted markets and undermined creative destruction? This paper explores these questions in the specific context of local implementation by studying the targeting of financial favors and the relationship of such targeting to local political incentives. Using unique and largely unexplored quasi-census firm-level data from annual tax surveys in China from 2007 to 2015, it demonstrates that financial favors disproportionately target larger, older, less productive, and loss-making firms. It then argues that career incentives for local officials explain the sub-optimal targeting of financial favors, showing that promotion likelihood for city leaders increases with higher levels of ‘excess’ financial favors to firms, particularly when these favors are provided to loss-making firms. Finally, it estimates costs to the Chinese economy from misallocated financial support by showing that financial favors are associated with less firm entry and lower sector-wide productivity growth. The paper provides important contributions to the literature on industrial policy, political incentives, and misallocation, and has important implications for China’s future growth and transition.
- Discussed on Pekingology podcast with Jude Blanchette
“Financial Sustainability of the Belt and Road Initiative Before and After Covid-19” in David Arase and Pedro Miguel Carvalho (eds.), The Belt and Road Initiative in Asia, Africa, and Europe (Routledge, 2022).
As Covid-19 paralyzed global economic activity in 2020, developing countries around the world delayed or canceled Belt and Road Initiative (BRI) associated projects and concerns grew that low-income countries would be unable to finance their Chinese debt. The pandemic also negatively affected the Chinese economy, limiting funding available for overseas investment. What might these developments indicate about the future of BRI? This chapter argues that although Covid-19 constitutes a short-term setback to BRI, in the medium-term the pandemic will likely lead to a more sustainable and regionally differentiated “BRI 2.0.” The roots of this shift go back to challenges created by the campaign-style approach to BRI from 2013-2018. The pandemic changed calculations on both the demand side and supply side in ways that sharpened these preexisting challenges, motivating continued BRI adjustments. Post-pandemic, China will likely become more cautious about BRI lending and investment and will emphasize more reputation-enhancing investments in health, digital spaces, and support for local industrial production, particularly in Southeast Asia.
“Localism in Retreat? Central-Provincial Relations in the Xi Jinping Era” (with Kyle Jaros) Journal of Contemporary China 30(131) (2021): 697-716.
Xi Jinping’s anti-corruption drive, personnel reshuffles, and institutional overhauls seem to mark a turning point in Beijing’s long-running fight against ‘localism’ (difangzhuyi). Yet, key questions remain about the scope and effectiveness of efforts to rein in China’s subnational officials. Has the Xi administration effectively combated localism by appointing more outsiders to provincial leadership teams? Or have strengthened oversight institutions made subnational officials more responsive to the center regardless of their individual backgrounds? To address these questions, this article distinguishes between different types of localism in contemporary China and the varying personnel ‘risk factors’ underlying them. Comparing the makeup of provincial party standing committees under Xi Jinping’s 18th CPC Central Committee (2012-2017) with those from the 15th-17th CPC Central Committees under Jiang Zemin and Hu Jintao (1997-2012), the analysis finds that Xi has accelerated personnel changes to address multiple forms of localism. At the same time, gaps in governance outcomes between local cadres and outsiders have faded since 2012 in several domains, implying that Xi-era institutional reforms have also played a role in curbing localism. Even under Xi, however, important personnel risk factors for localism have persisted and in some domains local-outsider differences in governance outcomes have actually increased.
“The Economic Security Dilemma in US-China Relations” Asian Perspective 45(1) (2021): 49-73.
China and the United States are caught in an economic security dilemma. In response to perceived economic aggression, both countries now feel impelled to bolster domestic economic security through protectionist and retaliatory measures that the other side perceives as threatening. In game theoretic terms, a mutually beneficial “Stag Hunt” coordination game devolved into an uncooperative “Prisoner’s Dilemma” after the global financial crisis. In the economic security dilemma that emerged under Trump and Xi, both sides unsuccessfully attempted to coerce opponent behavior, further harming both economies. Using a game framework—as opposed to a structural or leadership-based account—helps demonstrate that China’s recent reform reversal and revisionist approaches to the international economic order were not unavoidable parts of a long-term strategy, but rather developed partially as a response to perceived US aggressions.
“Loyalists, Localists, and Legibility: The Calibrated Control of Provincial Leadership Teams in China” (with Kyle Jaros). Politics & Society 48(2) (2020): 199-234.
Selecting provincial leaders is a fraught task for authoritarian regimes. Although central authorities more readily trust provincial leaders with close ties to the center, such loyalists may lack the local knowledge and connections necessary to govern adeptly. Using an original data set on the tenures and backgrounds of China’s provincial party standing committee members, this article explores how Beijing fine-tunes provincial leadership teams to resolve this dilemma. The analysis challenges the conventional wisdom that Beijing exerts its tightest personnel control in strategically important provinces. It shows that Beijing tolerates significant embeddedness of local leadership in provinces with complex governance challenges even when these provinces are important. Moreover, it finds that when the center reasserts control through appointments of loyalist personnel during times of crisis, it does so in a balanced manner. These calibrated personnel strategies highlight the extent to which authoritarian systems rely on local expertise and experience as well as top-down control.
- Cited in ChinaFile
“Leninism and Local Interests: How Cities in China Benefit from Concurrent Leadership Appointments” (with Kyle Jaros). Studies in Comparative International Development 54 (2019): 233-273.
The practice in Leninist political systems of assigning local leaders concurrent seats on higher-level leadership bodies presents a puzzle. In China, for example, a subset of provincial leaders hold seats in the central Politburo, while some city-level leaders hold seats in provincial party standing committees (PPSCs). While some scholars view these concurrent appointments as a form of top-down control or co-optation, others see these arrangements as a reflection of local power and a channel for the assertion of local interests. In this paper, we attempt to adjudicate between these different views empirically by analyzing the patterns and consequences of concurrent appointments of city leaders to China’s PPSCs. We introduce a new typology that distinguishes between the political and economic functions of concurrent appointments to differentiate four possible intergovernmental dynamics of control, co-optation, compromise, and concession. Through analysis of an original dataset on PPSC appointments and case studies of three Chinese cities, we show that concurrent appointments in China’s provinces can function as a means of concession, compromise, or co-optation, but we find little evidence that concurrent appointments allow higher-level authorities to firmly control or economically exploit localities.
“Good Countries or Good Projects? Comparing Macro and Micro Correlates of World Bank and Asian Development Bank Project Performance” (with Walter Kolkma and Aart Kraay). 2017. Review of International Organizations. Issue 3/2017.
This paper examines the micro and macro correlates of aid project outcomes in a sample of 3797 World Bank projects and 1322 Asian Development Bank projects. We find that project outcomes vary much more within countries than between countries: only 10–25 % of the variation in project outcomes is between countries, and the rest is within countries. Among country-level macro variables, GDP growth and the policy environment are significantly positively correlated with project outcomes. Among project-level micro variables, shorter project duration and the presence of additional financing are significantly correlated with better project outcomes. In addition, the track record of the project manager in delivering successful projects is highly significantly correlated with project outcomes. We find few significant differences between the two institutions in the relationship between these variables and project outcomes.
“Transitioning from Low-Income Growth to High-Income Growth: Is there a Middle Income Trap?” (with Ha Nguyen and Maya Eden). 2017. Journal of the Asia Pacific Economy 22(1): 5-28.
Is there a ‘middle-income trap’? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth strategies that are effective at high income levels, they may stagnate at some middle-income level; this phenomenon can be thought of as a ‘middle-income trap.’ Defining income levels based on per capita gross domestic product relative to the United States, we do not find evidence for (unusual) stagnation at any particular middle-income level. However, we do find evidence that the determinants of growth at low and high income levels differ. These findings suggest a mixed conclusion: middle-income countries may need to change growth strategies in order to transition smoothly to high income growth strategies, but this can be done smoothly and does not imply the existence of a middle-income trap.
- Republished as Chapter 14 in Bihong Huang, Peter J. Morgan, and Naoyuki Yoshino (eds.), Avoiding the Middle-Income Trap in Asia: The Role of Trade, Manufacturing, and Finance (Tokyo: ADB Institute, 2018).
- Cited in The Economist
“The Governance Game” (with Sheheryar Banuri, Luis F. Lopez-Calva, Ezequiel Molina, Abla Safir, and Siddharth Sharma). 2017. World Bank Working Paper No. 112876.
This uses a lab setting to test a series of policy proposals designed to constrain rent-seeking behavior in a policy-making context. The baseline governance game is conducted in the following way: subjects are randomly assigned to groups of four, with one subject randomly selected to be the “policymaker”, while the other three are the “citizens”. Citizens are informed that they can use their endowments to contribute to a group account. Any amount contributed to the group account are doubled. Once citizens have made their contribution decisions, the policymaker observes the contribution decisions of each citizen, and the total amount in the group account. The policymaker formulates a distribution “policy” to distribute the tokens among all four group members. The game is repeated for 20 rounds. With this basic framework, the authors implement and test the effect of three institutions designed to constrain policymaker rent-seeking behavior: voting, policy commitment, and punishment. The results show that voting and enforced commitment are the most effective policy mechanisms to constrain rent-seeking, and improve citizen welfare. The authors find policymaker punishment regimes to be largely ineffective, both in reducing rent-seeking and improving welfare of citizens.
“Expanded Privilege, Adjusted Risks: Developing Countries and Renminbi Internationalization,” in Carla Freeman (ed.), Handbook on China and Developing Countries (Northampton, MA: Edward Elgar, 2015), pp. 226-251.
This chapter takes an initial look at the likely impact of RMB internationalization on developing countries, focusing on the direct effects of the increased use of the RMB as an international currency as well as the indirect effects of an international monetary system that becomes increasingly multilateral. In the short term, RMB internationalization will boost China’s bilateral trade with developing countries by increasing the availability of trade financing and reducing exchange rate risk. Currency internationalization will accelerate the volume of outward investment from China by reducing the need for foreign exchange reserve accumulation while supporting continued current account surpluses, with associated net capital outflows. In the medium term, the RMB will become an increasingly important component of reserve currency baskets. Gradually, the emergence of the RMB as an alternative reserve currency will increase global stability. Emerging markets will benefit most, as they are most subject to US volatility. However, this ‘expanded privilege’ will be accompanied by an adjustment of risk from systemic ties to the US economy toward increased transmission of China’s domestic economic shocks.
“Growth in China 1978-2008: Factor Accumulation, Factor Reallocation, and Improvements in Productivity” (with Aart Kraay). 2011. World Bank Working Paper No. 92552.
China’s economic success over the past three decades can be decomposed into three broad contributions to growth; accumulation of labor and capital, growth induced by structural transformation (i.e. the reallocation of labor and capital across sectors and ownership units), and growth in total factor productivity. Understanding the evolution of these three growth determinants is important for understanding Chinas future growth potential. For example, in the neoclassical growth model, rapid growth through factor accumulation eventually slows with the onset of diminishing returns. And growth achieved through the reallocation of factors of production from less efficient to more efficient uses will also eventually peter out as marginal products of factors are equated across units. In this paper we perform a growth accounting exercise for China which allows us to separate these three broad contributions to growth. The main novelty of our exercise lies in our efforts to understand the role of reallocation of both capital and labor across major sectors (agriculture, industry, and services), and across ownership forms (state, collective, and other)
“China and the Financial Crisis.” 2010. Stanford Journal of East Asian Affairs 10(2): 20-38.
Growth in China’s economy has become too dependent on investment and exports, and it has been argued that the current model for economic growth is unsustainable. This article argues that China should promote the household consumption share and that, in the wake of the financial crisis, strong adjustments are needed to enable consumption to grow faster than the GDP. There are many possible measures the government can take, including fiscal and macro policies, price and tax measures, and financial reforms. Due to China’s current high growth and low income, there is large potential for consumption growth.
Work in progress
“Unpacking Source Country Effects: Views of Chinese Investment in the Global South” (with Ning Leng and Kerry Ratigan) (under review)
“Capture versus Redistribution: Local Determinants of Pension Fund SOE Share Transfers in China” (under review)
“When Fear Matters: Disaggregating Foreign Economic Cooperation Preferences in the Face of Conflict” (under review)
“Control, Career Development, and Diffusion: The Evolving and Contradictory Roles of Cadre Rotation in China”
Selected policy publications
“China’s Position in Global Supply Chains: Understanding the Effectiveness of Industrial Policy,” Testimony presented to the U.S-China Economic and Security Review Commission, June 9, 2022.
“‘Common Prosperity’ and China’s State Capitalist Welfare State: Implications for U.S. Policy,” in Lucas Meyers (ed.) Essays on China and U.S. Policy (Washington, DC: Wilson Center, 2022), pp. 101-132.
“The longer Trump’s China tariffs are in place, the greater the harm to America,” The Hill, February 17, 2022.
The US and China in Asia: Mitigating Tensions and Enhancing Cooperation (editor and contributor). A publication of the Pacific Community Initiative (Washington, DC: 2019).
World Development Report 2017: Governance and the Law (Washington, DC: World Bank, 2017).
Citizens as Drivers of Change: How Citizens Practice Human Rights to Engage with the State and Promote Transparency and Accountability (Washington, DC: World Bank, 2017).
Podcasts and blog posts
“Xi Jinping Says He Wants to Spread China’s Wealth More Equitably. How Likely Is That to Actually Happen?” A ChinaFile Conversation, March 3, 2023.
“How Security Fears Shape Public Views of the US-China Trade War.” U.S.-China Perception Monitor, Carter Center, October 26, 2022.
“China’s Dominance in Global Supply Chains.” China Global. Podcast hosted by Bonnie Glaser, German Marshall Fund, September 20, 2022.
“Picking Losers.” Pekingology: On Chinese Politics. Podcast hosted by Jude Blanchette, CSIS, August 11, 2022.