Subnational Leaders and Economic Growth
Evidence from Chinese Cities[1]
Yang Yao[2] and Muyang Zhang[3]
No. E2011006 December 22, 2011
Abstract This paper extends Jones and Olken (2005) to study the role of subnational leaders in economic growth using city-leader pair data collected from China’s 18 provinces for the period 1994-2008. With a significant number of leaders working in more than one city in their observed careers, our data allow us to compare leaders across cities and improve on Jones and Olken’s test. Further exploration shows that our sample does not suffer from biased attrition and our estimates of the leader effects are robust to transitory shocks and are not affected by nonrandom moves of leaders. Using the leaders’ personal effects estimated from our test, we find that more capable leaders focus more on the growth of the secondary sector than on the primary and tertiary sectors. In addition, we obtain finer results than Li and Zhou (2005)’s for the promotion in the Chinese political hierarchy. We find that personal ability is a better predictor than economic growth and its effect increases with a leader’s age.
Keywords: local leaders, economic performance, personal effect, promotion
JEL classification: H11, M51, O53, P26
[1] We thank Yuen-Yuen Ang, Steven Durlauf, Ethan Kaplan, Karl Scholz, Li-An Zhou and seminar participants in Peking University, the University of Wisconsin-Madison, the Third Doctoral Student Forum (Xiamen, December 2011), the Eleventh China Economic Annual Meeting (Shanghai, December 2011), the Second Annual CUHK-Fudan-Tsinghua Conference on Chinese Economy (Beijing, December 2011) for their helpful comments. The study is supported by the Major Project Program of the National Social Science Foundation of China (No. 09&ZD020).
[2] China Center for Economic Research, National School of Development, Peking University.
[3] China Center for Economic Research, National School of Development, Peking University.
