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Another way to look at the Chinese system is to emphasize its bureaucratic nature.

Many years ago,

a Western scholar wrote an article called China as a Permanent Bureaucratic Society.

Arguing that the goal of officials is to consolidate their position

in the bureaucracy and expand the resources flowing into their bureau.

Anthony Downs, author of a book called On Bureaucracy, treats bureaucrats

as highly rational people, but they could still have very different goals.

Some are entrepreneurial, and they just want to climb up the ladder of success.

Some of them are cautious and want to maintain their position.

They're very careful.

They don't want to make a mistake.

Others are predatory, meaning that they want to go out and steal what they

can from society, and really those people are often involved in corruption.

And some may just do their job well.

And those are the kinds that can contribute to society, and

those are precisely the kinds of leaders, or

kinds of bureaucrats that leaders really like.

Now some of these outcomes may differ, as it says, from personality, sector,

regions, but one of key variables also could be age.

And the graduate students in our social science division created

a dataset of local officials, when they were promoted, their age,

their education, the spending that they did, the projects that they ran.

And what they found was that younger officials who want to get promoted try

to run really big projects to prove to the Communist Party

officials above them that they are able to design and run projects.

That's really an important criteria for being promoted.

And in the end, they actually don't care if the project succeeds

because even if it falls apart two, three, four years later after they're gone,

they've already moved on to their next post.

So most officials, if you're successful,

you really don't stay in a place much longer than two to three years.

So you've moved on.

But older officials who have been in office starting to get three years,

four years, this is what the data show,

that they start to feel that they may remain in that location forever.

They may have to retire there.

And so we find that they in fact invest in public goods,

like schools, roads, clean environment.

Now, when political scientists want to use bureaucracy as a key part of their model,

they've come up with a concept that they call fragmented authoritarianism.

And rather than seeing power unified as in the totalitarian model,

they see power diffused among officials who run competing bureaucracies.

And what you often find is that bureaucracies have

overlapping authority over resources or permits.

So here what we find in fact is,

if this would be the Chinese system, what you see is

the arrows going down say that the information is flowing down the system.

Interestingly, there is very little information traveling across.

The main competition is among these different ministries.

And what they're often fighting over would be something that we would say

would be in between the bureaucracies or the bureaus.

It's a resource, let's say, such as land.

Who really controls land?

Well, there could be competition between these different bureaus over the land.

And what happens is they can't move forward.

Let's say they want to do a project, and they can't move forward on the project

because the two bureaus are fighting over who really controls the land and

who can allocate it.

So what happens is the decision gets kicked up to the next level.

And that official then comes down, much like an icebreaker in the North Pole who

will come down and break up the ice, and force these two bureaus

to make some kind of concession so that the project can move forward.

And as I said, information then travels really vertically up and

down, but not horizontally.

And with this bureaucratic perspective, we're really looking for

struggles within the government, between bureaus, and

that that's really an important part of this political system and of this model.

The outcomes that we get under market Leninism

are key to some of the problems that exist within the system.

We've talked about some of the advantages, and people often know about the advantages

of market Leninism because you can get the government driving growth.

But there are also serious problems that can exist with this model.

And the first one, really, is one of corruption, which historically,

traditionally, is a real threat to the regime.

And it's clear that Xi Jinping, today the leader of China,

sees corruption as the major threat to the regime and

has been going around arresting people for now close to two years.

Now, from a bureaucrat's perspective, there's also ways that you can make money

without really doing things that are illegal, and

this is what we call rent-seeking.

And in rent-seeking, bureaucrats will create rules or

regulations to decrease the number of producers of a product,

which thereby increasing the demand for

the product, therefore, the price of the product going up.

If I'm a bureaucrat and I've got a factory that I work closely with,

I can create a rule that makes it harder for competition, and

that specific factory can make a lot of money.

They can pay me a kickback for

helping them get a larger profit, get a higher price for their goods.

And we talk about that as being rent-seeking.

Now, we can also charge fees for access to these semi-closed markets.

This often happens internationally, where people may want to import a good.

I can block that if I'm an official, and then I say, well, you can't bring it in,

but I guess you can if you give me some kind of payment.

Now that's really more corruption, but the price of that good, if it can't flow

easily into the country, will go up, and that's really an opportunity for rents.

Now another characteristic that we find of

market Leninism is the high transaction costs of doing business.

If you have to make deals with all kinds of bureaucrats,

then that's really time-consuming.

At one point, I remember that there was a report of

a foreigner who was trying to set up a joint venture in China's northeast.

To set up that joint venture, he needed 135 stamps, 135 chops,

and each chop could have maybe cost him a dinner.

He has to take some official out to dinner, so you can imagine how many

dinners it would have to take in those days to close the deal.

Also, you get, under market Leninism,

you can get not too many regulations, but too few good regulations.

Now what you find then,

particularly in sectors such as healthcare, pharmaceuticals,

poorly regulated sectors that there's a lot of problems, a lot of health problems.

And we've seen this internationally where, and here where I live in Hong Kong,

with food, milk powder for babies, we've seen all these kinds of problems,

where the products produced in China are simply not high enough quality.

And so, even though you think there's too many regulations,

the fact is there's just too few good regulations.

Now, one of the characteristics of a bureaucratic model will highlight and

make you pay attention to the fact that the government-business relationship

is very tight.

And a lot of this is related again to what I said about laying off bureaucrats.

It's really hard to lay off bureaucrats in a system like China.

And when you do that,

you really have to figure out a strategy where they can make a living.

Now what happened in 1982, there were a lot of officials.

This was the first big movement to lay off officials back

in 1982 by then-premier Zhao Ziyang.

And the response was that the officials who got retired

in '82 then opened up what we call briefcase companies.

They just had this briefcase.

And what they would do is they would go to bureaucrats that they had known, and

take some resources from those guys and then ship it, move it over somewhere else.

And they would charge a fee for doing that.

And that's why they were called briefcase companies.

They never took control of the goods.

Now in fact, in 1986 to 89,

there was a lot of inflation in China, and part of the inflation

was really due to the fact that these briefcase companies were charging fees.

In 1998, there was really another very big reform Zhu Rongji carried out,

cut, some people would say, close to close to 50% of the bureaucrats.

And in those days,

people started to talk about bureaucrats jumping into the sea of business.

And so a lot of people, 2000 and 2001 in those days,

went off and started their own companies as well.

Today's businessmen and women, because of all these earlier

movements into the private sector by officials, today many of the people in

business have long-standing ties to officials with whom they have worked.

Now, one of the key points that's really absolutely critical for

understanding China's development, and I made it before,

if you can go back in your mind and sort of see the four boxes.

Well, the box down here was the box of civil society, and

I had a small subtitle that said Political Development.

And Westerners have long believed that economic growth, marketization,

privatization, the rise of a middle class, greater education,

the flow of information, all of this will lead to democracy and

the emergence of what we call civil society.

But, in fact, the Communist Party has been quite effective.

This is again keeping up in

the framework of the market Leninism quarter of that two-by-two table.

The CCP has done an amazing job really of weakening society,

organizing it, pulling it into Communist Party institutions.

It also refuses, the Party, and this is my biggest complaint if I were to have

a chance to go to talk to China's leaders, my biggest complaint is that the Party

just doesn't create new political institutions to manage societal demand.

We'll talk about this later on, in the last class in this course.

But there really are a lot of problems in Chinese society, and

people want to be able to express those problems and get response.

Society wants, it has lots of demands, but state being so

powerful just does not want to give in to those societal demands.

It mistrusts civil society, and therefore

it insists that society play by its rules,

and does not give the society the kind of autonomy that

would allow it to put greater pressure on the state.

So the CCP just does not want to give that kind of autonomy to society.

Now, it also does this, it's partly convinced of this,

that the West wants to overthrow the CCP through civil society,

through these nongovernmental organizations.

So what the Party wants to do is

it emphasizes good governance, the rule of law.

Currently, we see that the prime minister is putting forward a program for

reform of the administrative review and approval system,

sort of the kind of deregulization making it easier to get approval for projects.

But all of this without all this improvement of the governance,

without really ceding power to society.

Now, the last model that I would suggest that we could look at is really a model

that puts the state and society at some degree of loggerheads against each other.

Now it's very clear that state power is important.

It's important for taxation, it's important for boundary control.

So much of today we hear these stories of migrants and

states need to control their boundaries.

They need to control domestic security to prevent terrorism,

national security, defending territories against external forces,

so they need to develop a navy or a military, resource extraction.

They have to pull resources out of society,

out of the Earth to enrich the society.

We need regulations, we need legal decisions.

But in China, much of the conflict when we, as social scientists,

look at China, we actually see a lot of the conflict,

the result of the state effort to penetrate and dominate society.

And that society itself tries to resist those state agents through protests.

And the local state in China is extremely powerful.

You have the local territorial Party committee, and they can dominate politics.

They can dominate the courts, the police, control participation,

and in fact extract a lot of resources, then they try to control land.

And we often can separate out

sort of this local state authority from the central government.

And if you ask an average peasant in China who's more predatory,

which level of state is taking more, who's more oppressive to him?

Most villagers, most local people would say that it's the local state.

And they only wish that the central state knew what the local guys were doing

because then they would stop them and life would be a lot better.

1.2: Bureaucratic Model and Chinese Politics

Chinese Politics Part 1 – China and Political Science

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