AAS Annual Meeting

Interarea/Border-Crossing Session 606

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Session 606: State, Stability and Reform I

Fiscal decentralization: Guilty of Chinese corruption?
Kilkon Ko, National University of Singapore, Singapore

Fiscal decentralization and corruption relations are highly controversial in China. This paper tests whether fiscal decentralization deteriorates local governments’ corruption by analyzing the changes of corruption and fiscal decentralization between 1998 and 2008. The dependent variable, provincial-level corruption, is measured by multiple measurements: the number of corruption cases reported by citizens to the Central Commission for Disciplinary Inspection (CCDI) of Chinese Communist Party and Ministry of Supervision (MS), the number of filed cases of CCDI and MS, and the Procuratorate office’s filed cases at the provincial level. The primary independent variable, fiscal decentralization, is measured with two different ways: the ratio of local government’s expenditure to total government expenditure and the ratio of (local government’s on and off-budgetary expenditures – central government’s grants to local government) to (central government’s on and off-budgetary expenditures- grants to local governments). The controlled covariates are the number of state owned enterprises, the amount of real estate investments, political leadership change, the amount of public investment, the level of meritocracy, and the expenditure on anti-corruption enforcement. Time series pooled analysis model using both fixed and random effect models are used to test the impact of fiscal decentralization on corruption. The major preliminary findings suggest 1) the structural change of fiscal decentralization of China since 1998, and 2) the positive impact of transition from fiscal decentralization to administrative centralization on reducing some types of corruption such as embezzlement and misappropriation.

Plastic, Iron or Gold Rice Bowl: Explaining Welfare Reform Variation in China and Vietnam
Jennifer Noveck, University of Washington, USA

To be successful, even authoritarian regimes must respond to rapid socioeconomic changes. Since 1986, China has faced immense pressure to reform its welfare system. The policies that were enacted targeted poor urban families, while unregistered migrant workers and rural populations received no benefits. Since 2002, the government has experimented with addressing rural poverty by eliminating agricultural taxes and implementing the minimum livelihood guarantee nationwide (Gao 2010). However, to date China has failed to create a national social welfare system. All central government policies are implemented at the regional level and are “adapted to fit local conditions” (ISSA 2010). Distribution of benefits remains uneven and regressive. Despite trailing China in economic and social development, Vietnam made nationwide social security system law in 2006. This progressive law includes old age, disability, maternity, work injury, unemployment benefits. Although imperfect, eligibility is determined by standard requirements and is administered by the central government. How can we explain the variation in social welfare reform in these authoritarian regimes? Recent social welfare debates in political science have largely focused on the question of the decline or buoyancy of the modern welfare state in the face of globalization. With the exception of Rudra (2004; 2007) and Haggard and Kaufman (2008), few authors have explored welfare spending in developing countries and even fewer have examined variation in welfare reform in rapidly developing authoritarian states. Using China and Vietnam as case studies, I will focus on understanding the domestic causes of social welfare reform variation in authoritarian regimes.

The Rise of Judicial Politics in Taiwan
Chin-shou Wang, National Cheng Kung University, Taiwan (R.O.C.)

The judiciary has played a more and more important role to the politics of Taiwan. For instance, the court determined the result for the litigious and controversial presidential election of 2004. On top of it, Taiwan’s former President Chen Shui-bian was detained and prosecuted because of corruption cases. There is a new phenomenon for the politics of Taiwan, i.e. the rise of judicial politics. Unlike other countries whose judicial politics originated from constitutional courts, the rise of the Taiwanese judicial politics came from District Courts. There are three major causes for the rise of judicial politics in Taiwan. First, Taiwan’s judiciary has become more powerful and independent due to the efforts of some reform-minded prosecutors and judges. Second, there exists a flaw to the democracy of Taiwan. As clientelism and corruption are rampant, many politicians have been prosecuted for corruption. Third, elections in Taiwan have become very competitive. When disputations in elections occur, politicians would appeal to the judiciary for a resolution.

Political variables and subnational debt in India
Lawrence Saez, SOAS, University of London, United Kingdom

The effect of India’s high level expenditures on interest payments on the debt has received a great deal of attention in the literature on fiscal decentralization (Purfield 2004). Such literature maintains that disproportionately large subnational expenditures on interest payments on the debt reduce fiscal space for growth enhancing forms of public expenditure (Heller 2005) or that it increases electoral volatility (Nooruddin and Chhibber 2008). However, the political economy literature on the causes of subnational debt in India (Rao and Singh 2007, Lahiri 2000, Khemani 2002, Banerjee and Sumanthan 2007) continues to underanalyze the causal impact of political variables. Saez and Sinha (2009) attempted to redress this problem, but their study solely focused on a range of developmental fiscal expenditure types (e.g., education, health). This paper extends their analysis to a very important non-developmental fiscal expenditure type: a state’s interest payments on debt. Using an original dataset, called POLXDEBT-India, the paper will evaluate the explanatory power of some key political variables —political ideology, effective number of parties, alternation of power, timing of an election— in serving as a predictor of variation in the expenditure levels on interest payments on debt across India’s states. The author will show that the timing of a state assembly election in India appears to be the best predictor for variation in the levels of interest payments on debt.

Paradox of Welfare Reform in Japan and Korea: Civic Participation and the Performance of Pension Reform Initiatives
Sunil Kim, University of California, Berkeley, USA

This paper discusses the different consequences of national pension reforms in Japan and Korea, originated from their contrasting socio-political structures despite similar policy goals and initiatives. The two countries have initiated various welfare reforms including the national pension reform in the past decade, in response to the problems of economic recession and rapidly aging society. Japan managed to go through it while Korea has been stumbled on. It is puzzling, however, considering the conventional image of Japan’s immobilism and Korea’s swift reform practices. How was Japanese government able to achieve the policy goals against the strong objection from party politicians, tied to its rural and elderly constituencies? Why Korean government could not carry out the reform despite the incumbent administration’s strong leadership as well as the ruling party’s majority seats in the Legislature? Each civil society has differently responded to the government’s reform initiative. Has it influenced the reform performances? Japan has widely been canvassed as a statist society with apolitical and government-sponsored civil society sector. Korea has contrarily been regarded as a contentious and politicized society with active participation of civil society organizations in the state decision-making processes. This study examines the relationship between the aspects of civil society and policy performances. It will be discussed what the determining variables of the unpopular reform performances are, with the cases of the national pension reforms in the two countries. This paper is an articulation of one of major themes of my doctoral dissertation, to be completed in summer 2011.