In 2004, when Stanford sociologist Xueguang Zhou deliberated on his next research project, he realized he had grown out of touch with China as radical reforms were enacted and massive economic growth transformed the nation. So he immersed himself in fieldwork in a northern Chinese rural township to see the changes firsthand.
That fieldwork led Zhou to delve into the workings of China’s massive bureaucracy in an attempt to answer the question: How is China governed? The empirically-informed theoretical framework Zhou developed to address this question is the subject of his new book, The Logic of Governance in China: An Organizational Approach (Cambridge University Press). We spoke with Zhou, the Kwoh-Ting Li Professor in Economic Development, a senior fellow at the Freeman Spogli Institute for International Studies, and APARC faculty, about the book and some of the insights it offers into the institutions and mechanisms in the governance of China. Watch the conversation:
How does policy formulated in Beijing translate to and get executed at local levels? The problem of how to govern China from a centralized seat of power has been, as Zhou says, “a fundamental tension” for thousands of years. Beijing tends to move “decision rights and resources” to the center, although these are exactly what is needed for effective governance at the local level.
Through his years of fieldwork, Zhou was able to develop a “bottom-up kind of approach to understanding how China has been governed by macro policies [...] implemented through local bureaucrats.” This approach, he says, is largely missing from studies of contemporary Chinese society, which tend to focus on Beijing’s top-down decision-making. Zhou’s framework explains how — given the fundamental tension between Beijing’s “all-encompassing role” and local governance — domestic policy gets effectively carried out at the municipal or even village levels.
A Paved Road to Every Village
One phenomenon through which Zhou looks at how national policy translates to the local level is the case of the “Paved Road to Every Village” (PREV) project. When this project was launched by the provincial government in 2004, there were ample large highways in the region, but villagers were still forced to traverse rutted dirt roads that were prone to flooding in the rainy season, a clear obstacle to growing the agricultural economy.
Project funding, however, was complicated. Beijing was supplying 70,000 renminbi (RMB) per kilometer of road, but the actual cost was RMB 240,000/km, so villages had to come up with the rest (for context, the average per capita annual income in the region was 3,000 RMB). Facing such a deficit, many villages simply refused to take part in PREV. Zhou’s fascinating case study looks at two village leaders — one entrepreneurial, one reluctant — who decided to take up the challenge.
To explain how projects like this get funded in China, Zhou expands on Hungarian economist Janos Kornai’s concept of “soft budget constraints.” Kornai saw that in a socialist economy, state ownership of enterprise meant that factories or companies experiencing financial difficulties had to be rescued by the state. As Zhou explains, the “concept is upward, demanding new resources” from the state. In the Chinese context, however, local authorities move downward to, for example, the companies in their region. That’s why Zhou calls the phenomenon inverted soft budget constraints: at the local level, officials attempt to enlist private enterprises to underwrite government projects. Why would they be willing to do that? Businesses understand that if they do fund such projects, then the officials will later provide “privileged access” to the resources for other government projects.
This reliance on local enterprises to accomplish national programs illustrates another important lesson for Zhou, who says that the growth and energy of the Chinese economy have not been a result of direct government activity, but rather the government has made use of “private entrepreneurs [...] to participate in this kind of public project, financing, and development.”
This process, however, does not always work as expected. Officials can end up compelled to rely on informal social ties to purchase required items like cement, sand, and equipment on credit, which can incur huge collective debts that the village is unable to repay. In the end, these debts can do great harm to the financial viability of small villages. This sort of ad hoc funding is problematic, Zhou observes, because both entrepreneurs and villagers “want to live in a more certain environment,” where necessary projects are well-financed, rather than resorting to a desperate attempt to gather resources by any means possible.
The Distribution of Authority in the Bureaucratic State
In another case study, one that looks at environmental regulation, a doctoral student Zhou had been directing was embedded in a municipal environmental protection bureau during the implementation of a five-year plan by the central government’s Ministry of Environmental Protection (MEP) to control sulfur dioxide and chemical oxygen demand (an indicator of water pollution level).
Such plans translate to thousands of projects nationwide, making the task load impossibly large for the central government to handle alone. To explain how authority rights are distributed among levels of government Zhou developed a “control rights” theory. In this case, that means the central government (principal) would retain the right to set pollution goals, the provincial bureau (supervisor) might retain the right of inspection, while the local governments (agents) might have the right to performance appraisal and incentive provision. Zhou holds that these control rights are distributed according to the different modes of Chinese governance, ranging from “tightly controlled,” where the central government retains all rights, to a federalism mode, where all rights are given away to the supervisor level.
Bargaining and Collusion
Zhou uses this and ancillary models to understand bureaucratic coping behaviors. One of those is bargaining. He offers examples of how municipal or county officials reacted to poor pollution inspections by bargaining with the provincial levels and redirecting blame to others, often successfully changing report results in their favor.
Another strategy is collusion, which he argues “has become an informal but highly institutionalized practice,” one that is “common knowledge.” This was witnessed, for example, during provincial family-planning inspections. To prevent possible fraud or manipulation of data, provincial inspectors would have teams conduct unannounced “sudden attack” inspections. But local officials used “guerrilla tactics” to surveil and disrupt the provincial team’s efforts. Upon discovering that a provincial inspection team has arrived, local officials might record the team’s license plate numbers and share those with other officials elsewhere, and then begin shadowing them, providing mobile phone updates on their routes and possible next destinations.
Other collusive strategies might include the manipulation of data, or even ranking counties with good performance at the bottom of a list so that they are more likely to be the ones inspected, with the result being a glowing report
Zhou’s goal is not to expose these behaviors but to understand them. If we look closely at apparently contradictory bureaucratic patterns and cases, he says, then “we can theorize about the rationales behind why they behave this way, and under different circumstances, they behave differently.”
Protest in the Chinese Context
In the last part of his book, Zhou looks at how individuals and social groups respond to authoritarian rule. How can large-scale collective action arise in China, where organizing outside of state-sponsored collective actions is forbidden? Zhou answers that the state — by imposing similar conditions across the country and reducing the majority of Chinese citizens to the same level — fosters the cultivation of similar grievances. At some point, this erupts into open protests, or alternatively, what Zhou calls “collective inaction,” like noncompliance with official campaigns.
The recent protests in China against COVID measures are a perfect example of this phenomenon. After years under the strict zero-COVID policy, masses of Chinese citizens have similar grievances, leading to open protests. Zhou observes that “China’s zero-COVID policy is an example of campaign-style mobilization, a political instrument that Beijing has routinely deployed to achieve policy objectives and to reassert control at the local level.” But with this approach, there is a danger that local officials can become overzealous. In the case of the COVID pandemic, officials have been highly motivated to avoid responsibility for outbreaks.
A Threat to China’s Charismatic Leaders
Another idea in Zhou’s book is that of charismatic leadership, which he asserts is “essential to the legitimacy of the Chinese state.” The Chinese Communist Party must continue to persuade citizens that they must “put all [their] power into the hands of one person or one ruling party.” As the deification of Xi Jinping in recent years shows, this is accomplished by depicting the leader and party as all-knowing and possessing “a mighty power to do all the right things.”
"Every bureaucracy seeks to increase the superiority of the professionally informed by keeping their knowledge and intentions secret," political economist and sociologist Max Weber wrote in his treatise Economy and Society. The 'official secret' is the source of power and the specific invention of bureaucracy, he said, “and nothing is so fanatically defended by the bureaucracy as this attitude.”
Zhou’s empirically-informed findings and unified theory, however, shed light precisely on the secretive workings of the Chinese bureaucracy. This may explain why the original Chinese version of Zhou’s book, published in 2017, was “unshelved” after its initial print run, a euphemism for withdrawing a book from circulation and essentially making it disappear. When asked what he thought was the reason for the book’s disappearance from the Chinese market, Zhou invokes Weber’s idea of disenchantment, and suggests that by revealing the logic behind China’s governance, his book was “probably a threat to China’s charismatic leaders, and also to the Leninist party, the very foundation of that party governance.”