16 Years After Civil Society Experiment, One Chinese City Government is Larger Than Ever

November 19, 2004

According to a report in the Beijing News, 16 years of reforms aimed at limiting the size and role of government in one Chinese city have been a relative failure, in large part as a result of structural incentives within the Chinese bureaucracy.

Designated by the State Council as a special reform zone in 1988, Shishi city, Fujian province implemented reforms aimed at creating a “small government, but large civil society.” Initially, these reforms met with success. Total government employment reached only about one-third of the standard personnel allotment for similar cities. However, by 2004, the size of local government had mushroomed dramatically. Total numbers of Party and government bureaus increased by about a half, while total employment at state-sponsored public institutions more than doubled.

In part, internal bureaucratic incentives drove this expansion. As a result of a more streamlined governmental structure, Shishi lacked local government bureaus directly corresponding to higher-level organizations. This rendered Shishi ineligible for monies from provincial bureaus, such as the forestry bureau, which disburse funds directly to their lower-level counterparts. This created an incentive to establish a corresponding local government bureau simply to receive central funding. Similarly, central government rules required Shishi to create a unique local science and technology department simply to be designated as an “advanced scientific county” and receive associated rewards.

While a tendency towards bureaucratic sprawl is not unique to China, both the lack of democratic constraints and the presence of an incentive system that actually rewards an increase in bureaucracy means that local Chinese governments are particularly susceptible. Absent efforts to address these structural incentives, Chinese efforts to transfer local government functions to independent civil society organs may face difficulty.