Patronage and Power by Hillman Ben;

Author:Hillman, Ben; [Hillman, Ben]
Language: eng
Format: epub
Publisher: Stanford University Press
Published: 2014-12-11T05:00:00+00:00

FIVE

Political Competition over State-Funded Programs

Generating revenue to fund mandates has been a preoccupation of local governments in China since economic and administrative reforms introduced from the late 1970s made China one of the most decentralized states in the world. Much of the early scholarship on the local state in reform-era China focused on different local government approaches to funding mandates and the implications of their approaches for China’s political economy and for state-society relations. In the industrialized coastal areas scholars observed that local governments were funding their mandates by developing local state-owned enterprises and by promoting private industry that could be taxed. Scholars working in these regions identified a “developmental” local state motivated to provide the conditions necessary for further industrialization and economic development.1 Subsequent case studies of China’s agricultural hinterland identified a very different type of local state. Without access to proceeds from industrialization, many rural counties and townships preyed on farmers by raising taxes and fees.2 The hardship caused by these taxes and fees became widely known as the “peasant burden” (农民负担 nongmin fudan).

Laxiang County represents a third type of local state in China. As in the central provinces, livelihoods in China’s western regions are primarily dependent on agriculture. There is very little secondary industry and average incomes are much lower than in the coastal provinces. Indeed, much of China’s remaining rural poverty is concentrated in the western regions.3 However, unlike in many other parts of China’s agricultural heartlands, local governments in the Poshan area have not been financially squeezed; neither have they been overly predatory toward the rural populace. This is because Laxiang County and many other counties in the region have benefited from central government subsidies, which they receive as a result of their official status as either impoverished counties (贫困县 pinkun xian) or as ethnic regions (民族地区 minzu diqu), or both.4 Central and provincial government subsidies are the main source of revenue for counties such as Laxiang. Fiscal transfers account for nearly 90 percent of local government expenditures in the Poshan region.5

The general-purpose fiscal transfers that are provided annually cover operating expenses such as salaries, routine administration, and basic services. However, for a wide range of policies and programs designed to develop the economy and improve local livelihoods, Poshan-area governments rely on special-purpose funds. Special-purpose funds could be announced at any time by ministries seeking to further a policy goal. In Laxiang County in 2010–2011, projects funded by special-purpose funds included hospital and rural health clinic construction (Ministry of Health), upgrades to low-yielding farmland (Ministry of Agriculture), maintenance and reconstruction of schools (Ministry of Education), earthquake-proofing of houses (Ministry of Construction), and forest fire prevention (Ministry of Forestry). There was also funding for youth and elderly outreach activities supported by the Ministry of Civil Affairs.6 Special-purpose funds are usually allocated to specific bureaus for specific projects. In 2011, for example, Laxiang County was allocated a grant to earthquake-proof rural houses. A total of 4,150 houses were to receive a combined total of 15.5 million yuan for retrofitting and reconstruction.

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