Dual Decentralization and Fragmented Authoritarianism in Governance: Crowding Out among Social Programmes in China
| Published date | 01 August 2016 |
| DOI | http://doi.org/10.1002/pad.1760 |
| Author | Ka Ho Mok,Jiwei Qian |
| Date | 01 August 2016 |
DUAL DECENTRALIZATION AND FRAGMENTED AUTHORITARIANISM
IN GOVERNANCE: CROWDING OUT AMONG SOCIAL PROGRAMMES
IN CHINA
JIWEI QIAN
1
*AND KA HO MOK
2
1
National University of Singapore, Singapore
2
Lingnan University, Hong Kong
SUMMARY
In this paper, we use city-level datasets of social assistance programmes over 280 cities between year 2003 and 2011 to verify
the existence of the crowding out between social assistance programmes and unemployment insurance in China. In other words,
the expansion of social assistance programmes is associated with a reduction in the enrolment of unemployment insurance. With
verifying the existence of the crowding out, this article argues that the crowding out is a result of an ineffective coordination
across government departments. In the process of ‘dual decentralization,’in which the central government has delegated welfare
provision responsibility to local governments, the misalignment of incentive and institutions between central and local govern-
ments explains the ineffective coordination. Different from many studies in the literature, this paper presents an adverse conse-
quence of China’s bureaucratic incentive system in social policy implementation. Also, while the conceptual framework
‘fragmented authoritarianism’has highlighted the policy ineffectiveness in the economic policy area, this paper contributes to
this literature by illustrating the policy ineffectiveness in the social policy areas. Copyright © 2016 John Wiley & Sons, Ltd.
key words—China; crowding out; dual decentralization; fragmented authoritarianism; social assistance; unemployment
insurance
THE QUEST FOR SOCIAL HARMONY AND EXPANSION OF SOCIAL PROTECTION
Since 2003, under the policy of ‘building a harmonious society’, the Chinese government has begun to shift its ex-
penditure emphasis towards social policy, and greater public funding has been appropriated for social assistance
programmes. Total government expenditure on employment and social security (including social assistance
programmes) rose from 1.9 per cent of GDP in 2003 to 2.5 per cent in 2013.
1
Government expenditure on the major
social assistance programme, the Minimum Livelihood Guarantee Scheme (Dibao), increased from RMB2.2 bil-
lion in 2000 to RMB72 billion in 2014, an average annual growth of 28 per cent.
2
Interestingly, in the context of expanding social assistance programmes, there are two conundrums regarding
social protection for urban workers. First, unemployment insurance cover remains very low compared with other
social programmes in China. Although social insurance is compulsory for urban employees, including unemploy-
ment insurance and a basic pension scheme, many employees choose not to enrol in the unemployment insurance
programme. In 2012 for example, about 60 per cent of urban employees were not enrolled for unemployment in-
surance. In contrast, the number of urban employees with a basic pension scheme has increased much faster since
2000. In 2014, about 43 per cent of urban employees had unemployment insurance while 65 per cent had a basic
pension scheme (Figure 1).
*Correspondence to: J. Qian, East Asian Institute, National University of Singapore, 469 Bukit Timah Road, Singapore 259756. E-mail: jiwei.
qian@nus.edu.sg
1
China Statistical Yearbook, various years.
2
Statistical Communiqué for the development of social services in China, 2014.
public administration and development
Public Admin. Dev. 36, 185–197 (2016)
Published online 2 June 2016 in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/pad.1760
Copyright © 2016 John Wiley & Sons, Ltd.
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