Note: The author of this article is Lan Xiaohuan, Ph.D. in economics from the University of Virginia and associate professor of economics at Fudan University.
A few years ago, I participated in the investment mobilization meeting of a city in central China, and a cadre with good investment promotion performance shared his experience"Be sensitive to investment opportunities, be a persistent tracker, and not give up easily. It is necessary to exercise yourself in attracting investment, so as to achieve 'copper head, iron mouth, downwind ears, rubber waist, teapot belly, rabbit legs'. "Copper head refers to daring to break through and dare to create opportunities; Iron mouth refers to being able to speak well and not afraid of wearing out the skin of the mouth; Downwind ears and rabbit legs, referring to being well-informed and quick to act; Teapot belly refers to being able to drink and socialize. These descriptions are very graphic and easy to understand.
I didn't know much about what a "rubber waist" was at the time, but I heard him explain: "You should respect the merchants, you should be able to bend down when you should be soft, but you can't give in casually during the negotiation process, and if it involves the important interests of the city, you should straighten your waist when you should stand up." "These characteristics remind me of a salesman. His next words reminded me of customer service: "Pay attention to etiquette, pay attention to details, and do four." First, we must keep our promises; Second, remember to reply, and reply to the customer's information in a timely manner; Third, deal with things with the fastest speed and highest efficiency; Fourth, to be a caring person, visit the merchants to make preparations in advance. ”
Of course, making a presentation on stage can be beautifully spoken, but in reality it may be a different story. Later, I dealt with the city's investment cadres several times, they were indeed very active, very diligent, even if some projects have been said to be not suitable for the introduction of the area, the other party will repeatedly contact, take new conditions and plans to continue to try, will not give up easily. InDuring several exchanges, I learned that the process of the city's investment promotion work is well set up, and the relevant incentive mechanism is relatively in place.
China's bureaucratic system is huge, and the bureaucratic system has been one of the pillars of politics and society since ancient times, and it has always had a tradition of absorbing social elites and has abundant human resources
According to the sixth census in 2010, about 22% of the urban population aged 25-59 have attended university (including junior colleges), but more than half of the ** staff have attended university. More than 70 percent of 25-40-year-old** workers have gone to college, while only 30 percent of urban populations of the same age have gone to college. Although today's society has long been diversified, there are many choices for outstanding talents, but the tradition and values of "learning and excellence" have always been there, and it is still the most resourceful and influential department in our country, so it is very popular every year, at least to reach a college degree or above to apply for the examination, and the admission ratio is also very low.
Focusing on the local government, from the perspective of the number of people, the local government is the absolute subject of the bureaucracy. According to the total number of civil servants, ** civil servants account for only 6%, and if various public institutions are also included, ** accounts for only 4%. This is an outlier among the major countries of the world. The share of civil servants in the United States is 19%, in Japan it is 14%, in Germany it is 11%, and the average for OECD countries is as high as 41%.
** Performance and incentives
The selection and incentive mechanism of talents is the core of the bureaucratic system, which determines the effect of the operation. The so-called incentive mechanism is simply "carrot and stick": what are the benefits to the individual when things are done well? What's the harm of messing up? Because economic development is the core task of the local government, the incentive mechanism needs to closely link the personal gains and losses of cadres with the local economic development, not only to motivate local officials, but also to motivate grassroots civil servants.
From the perspective of "carrots", economic development is the main achievement of local officials, which has an important impact on their prestige and promotion. For the majority of ordinary staff, although there are few opportunities for promotion, the actual income is closely related to the local financial situation, and is also closely related to the performance of the department and the unit, which in turn depends on the local economic development. From the perspective of the "big stick", on the one hand, there is the supervision and punishment system of party discipline and state law, and on the other hand, there is also fierce competition between regions to attract investment. In order to prevent the loss of investment and industry, localities** need to improve the local business environment and increase efficiency. If a department harms the overall business environment for the sake of the department's interests, or if inter-departmental disputes reduce administrative efficiency, the higher authorities will also intervene for the sake of political performance.
The term of office of local chiefs is limited, and if they want to rapidly increase economic growth during their tenure, they can often only increase investment and embark on various large-scale projects and projects. Taking the secretary of the municipal party committee and the mayor as an example, the average tenure of office in a city is only three or four years, and infrastructure or industrial projects can be completed in two or three years at the earliest. On average, about 30% of prefecture-level cities in the country have to change mayors or municipal party secretaries every year, so investment in various places is in full swing, and the "political-investment cycle" is relatively frequent. Investment requires capital and the support of land finance and land finance. Therefore, in the first few years of his tenure, the number of land transfers generally increases. Most of the new land is located in the suburbs around the city, so urban development has shown a trend of "spreading the pie": the construction area is expanding more and more, but it is generally not compact enough, the commuting time is long, the cost is high, the congestion is aggravated, and it is not conducive to environmental protection.
Although there is no conflict between the motivation for promotion and the goal of promoting economic growth, and it has considerable explanatory power for regional economic performance, this investment-oriented growth model will cause many undesirable consequences.
Before 2016, after being promoted or transferred, there was no longer any need to be responsible for the liabilities during the tenure, and the new officials usually ignored the old accounts and would continue to increase investment, so the debts continued to rise. After the economic development reaches a certain stage, the number of low-risk and high-return industrial investment projects decreases, and the economic benefits of infrastructure and urban construction investment are also weakened. In addition, for the sake of political performance, local governments often focus on "visible" engineering construction, such as urban roads, bridges, subways, green spaces, etc., and relatively ignore "invisible" projects, such as underground pipe networks. Therefore, every time there is a heavy rain, there are many cities that "see the sea".
Because the performance incentive has an important impact on local investment, in recent years, in the major supply-side structural reforms such as "deleveraging, destocking, and de-capacity", the reform of local performance appraisal has also been included. In 2013, the Organization Department of the CPC Central Committee issued the "Notice on Improving the Performance Appraisal of Local Party and Government Leading Groups and Leading Cadres", which particularly emphasized: "We should not only take the GDP and growth rate as the main indicators for evaluating and evaluating the performance of the government, but also not the ranking of the GDP and the growth rate.
*The relevant departments cannot measure the development effectiveness of provinces (autonomous regions and municipalities directly under the Central Government) solely by the GDP and growth rate of the region. Local party committees at all levels should not simply evaluate the performance and evaluation of the leading bodies and leading cadres at the next level by the ranking of the gross regional product and the growth rate. After clarifying that "the selection and appointment of personnel cannot be judged solely by the gross regional product and growth rate," coupled with a series of fiscal and monetary reform measures, the growth rate of local GDP and the growth rate of fixed asset investment began to decline. In 2019, the General Office of the Communist Party of China issued the "Regulations on the Assessment of Party and Government Leading Cadres", which clarified that when evaluating the work performance of local party committees and leading groups, it is necessary to look at "comprehensive work" and "look at the situation and actual results of promoting the construction of economic, political, cultural, social and ecological civilization in the region, solving the problem of unbalanced and insufficient development, and meeting the people's growing needs for a better life".
In the first assessment and promotion, political performance is very important, but this does not mean that the relationship is not important. Whether it is the company or **, as long as the work performance cannot be measured 100% clearly("Must-remember" note: like the number of courier deliveries),Then the subjective evaluation of the superior is important, and the relationship with the superior is important. Favors and performance can be mutually reinforcing: outstanding performance is more likely to be favored by leaders, and leadership support can help to do a good job. However, in order to expand their power and influence, certain leaders ignore their work performance and appoint cronyism in the selection and appointment of personnel, and this may discourage their subordinates. In areas where such problems are prominent, in order to restrain the "willfulness" of leaders, the bureaucracy may engage in seniority in promotions, because age and length of service are objective and transparent, and cannot be arbitrarily modified. But in this way, the efficiency and enthusiasm of the ** department will be reduced.
Although the relationship between local officialdom and personal relations will have an impact on the local political and economic ecology, I am skeptical that it is important enough to have special explanatory power on the overall economic phenomenon. On the one hand, there is competition between localities, which will restrict local governments from acting arbitrarily; On the other hand, the human relationship network relies on the key people in it, and there is great uncertainty. But whether Zhang Sandezhi or Li Si is unlucky, the work is still the same and must continue to be done, and the development of the economy is still the theme of local work.
Achievements and promotions are undoubtedly very important to local leaders and members of leading groups, but they do not motivate the vast majority of civil servants. Their day-to-day work has little to do with their political achievements, and their hopes of promotion are very slim. In the huge group of ** staff, cadres at and above the "county level" account for only about 1% of the total number. On average, among all the full-time cadres in a county, the probability of being promoted to the deputy county level is only 1% every year, and from the deputy county-level cadre to the deputy secretary of the county party committee, there are several posts and steps, often for years or even decades. Therefore, the most important incentive for the vast majority of ** staff is not promotion, but actual income and some work benefits, including salary, bonuses, subsidies, subsidies, affordable canteens, comfortable office conditions, and so on. These revenues and benefits are closely linked to local economic development and regional finances, and vary widely between regions and even between sectors within the same region. Most people can feel this difference in their daily work and know that they can benefit from the development of their local area and their own organization. If there are grassroots departments that undermine the business environment, they will also be subject to supervision and restraint.
Yeyuhai Mountain Tourist Resort, Shuicheng District, Liupanshui City.
Economists focus on the study of tangible "rewards and punishments", emphasizing external incentives and institutional environments, but in fact, the inner emotional drive is also very important. It is impossible for any organization, whether it is a company or a company, to motivate employees only by external rewards and punishments. External rewards and punishments inevitably require visible work performance, and the vast majority of jobs are not like couriers, there is no clear and real-time measurable performance, so a sense of mission, values, vision and other driving mechanisms related to inner feelings are required. "Don't forget the original intention", "family and country feelings", "serve the people", etc., are all potential spiritual strength. The cadre selection principle of "having both ability and political integrity, and putting morality first" also emphasizes the importance of internal drive and self-restraint.
Corruption and anti-corruption
**One of the major drawbacks of the development model of investment and land finance is that there is serious corruption. Land-related transactions and investments are often large in amount and highly concentrated in the hands of individuals, which can easily breed corruption. In recent years, most of the major and important cases investigated and dealt with have been related to land. Nearly half of the corruption cases reported by the Supreme People's Procuratorate's Procuratorate from 2008 to 2013 were related to land development. With the rise of financing platforms and various financing channels, funds suspected of corruption have been grafted onto capital markets and financial instruments, becoming more secretive and large. Since the 18th National Congress of the Communist Party of China, "anti-corruption" has become one of the main themes of political life, and has maintained a high-pressure posture. By the end of 2019, a total of 15 cadres at and above the county and department level had been filed and reviewed across the country60,000 people, including 414 central management cadres and 1 departmental and bureau-level cadres80,000 people.
From the perspective of economic development, there are two striking characteristics of corruption in our country. First, corruption and rapid economic growth have coexisted for a long time. This conflicts with the overly simplistic mainstream concept of "corruption harms the economy", and the short-selling of China's economy on the grounds of corruption has repeatedly failed. Second, with the deepening of reform, the relationship between the market and the market is constantly changing, and the forms of corruption are also changing. Most of the corruption cases in the 80s of the 20th century were related to the "official downfall" and various "speculation" under the dual-track system; The cases in the 90s were mostly related to the reform of state-owned enterprises and the loss of state-owned assets; Since the beginning of the 21st century, cases related to land development have become mainstream.
To understand the relationship between corruption and economic development, it is critical to understand the different effects of different types of corruption. Corruption can be broadly divided into two categories. The first type is "predatory" corruption, such as extortion of private enterprises, bribery from ordinary people, embezzlement and misappropriationThis type of corruption is extremely detrimental to economic growth and property rights protection. With the continuous improvement of China's various systems and legal system and the continuous progress of various supervision techniques, this type of corruption has been greatly reduced. For example, in the first decade of the 20th century, there were many non-standard fines and arbitrary charges, and the common solution was to give cash to the clerk privately to avoid higher fines or charges. Nowadays, this situation is much less, fines must be paid with certificates, they have to be paid at a specific bank or through a mobile phone, the money is clear where it comes from, and it is difficult to be corrupt. China also basically does not have the "petty theft" corruption common in some countries in South Asia and Africa, such as putting money in the passport when passing through the airport inspection, and being found by the police to ask for money. In recent years, China's overall business environment has been improving. According to the ranking of "ease of doing business" published by the World Bank, China has risen from 89th in the world in 2010 to 31st in 2020, and foreign direct investment into China has remained at a high level of about $130 billion per year for the past five years.
The second type of corruption is the "joint wealth" type of corruption. For example, the company uses its authority to approve the project to the related enterprise, and the enterprise not only has to complete the project and contribute to the company's achievements, but also gives a lot of benefits in private. This type of corruption occurs in the process of attracting investment, and related investment and construction can promote short-term economic growth, so corruption can coexist with economic growth for a period of time. However, from the perspective of long-term healthy economic development, this kind of corruption will bring about four major evil consequences. First, the long-term bias in investment has led to structural distortions in the economyThe proportion of capital income is high and the proportion of labor income is low, and the growth rate of people's income and consumption is slow. Chapter VII deals with this distortion. Second, it distorts the allocation of investment and credit resources, squanders a large amount of money on projects with inefficient related households, and pushes up debt burdens and risks. Third, the trading of power for money has widened the gap between the rich and the poor. Fourth, interest groups may be formed at the local level, which may not only restrict market competition, but also undermine the political ecology and cause large-scale "collapse corruption."。Since the 18th National Congress of the Communist Party of China, it has been emphasized several times that gangs, gangs, and interests are never allowed within the party, and the construction of a new type of political and business relationship has been emphasized, which is aimed at this situation.
The anti-corruption campaign since the 18th National Congress of the Communist Party of China (CPC) is part of a broader systemic reform, which includes not only economic structural reforms such as "deleveraging", but also reforms to prevent financial risks, as well as market-oriented reforms of various factors of production, especially land. The fundamental purpose of these reforms is to change the economic development model of the past, so it is necessary to break down the interest groups formed under the old model. Until the reform is completed, the anti-corruption campaign will remain high-pressure for a long time. In 2020, researchers at Harvard University published the results of an independent poll of urban and rural residents in China, which began in 2003 and interviewed more than 30,000 people. The results of the survey show that the anti-corruption achievements after the 18th National Congress of the Communist Party of China have been widely recognized. In 2016, about 65% of respondents believed that the local government was generally clean, compared to 35% in 2011.
Residents' satisfaction with *** has been at a high level for a long time, with about 83 points on a 100-point scale; Satisfaction with the local ** is lower, with about 78 points for the province and 70 points for the county and township.
However, before the transformation is completed, places accustomed to the old way of working will inevitably become forward-looking and shrinking under the high pressure of anti-corruption. In 2016, ** began to emphasize that "mediocrity, laziness, and slackness are also a kind of corruption", and it is necessary to eliminate "being an official and not doing anything". In 2018, the General Office of the Communist Party of China issued the "Opinions on Further Encouraging the Majority of Cadres to Take on New Responsibilities and New Actions in the New Era", emphasizing "establishing and improving the fault-tolerant mechanism, tolerating the mistakes and mistakes of cadres in reform and innovation, and distinguishing the mistakes and mistakes made by cadres due to lack of experience and trial and error in promoting reform from those who knowingly commit violations of discipline and law; Distinguish between mistakes in exploratory experiments that are not clearly restricted, and violations of discipline and law that continue to go their own way after they are explicitly prohibited; It is necessary to distinguish between unintentional negligence in promoting development and violations of discipline and law for personal gain. "It remains to be seen how these measures will be implemented.
Over the past 40 years of reform and opening up, social wealth has grown rapidly, and corruption is inevitable. In the so-called "Gilded Age" of the late 19th and early 20th centuries in the United States, all kinds of corruption were also very rampant, "nepotism" became more and more intense, and the economy corrupted politics, which in turn corrupted the economy, forming the so-called "systematic corruption" ("Must-Remember" note: systematic corruption). After decades of political and rule of law construction, it gradually eased. In the long run, anti-corruption is part of the country's governance capacity building, in addition to the construction of a system specifically aimed at corruption, the more fundamental measures are to streamline administration and delegate power, and change the role. As put forward in the report of the 19th National Congress of the Communist Party of China, it is necessary to "transform the best functions, deepen the streamlining of administration and decentralization, innovate the way of supervision, enhance the credibility and execution, and build a service-oriented model that satisfies the people".