THE PARADOX OF PERFORMANCE REGIMES: STRATEGIC RESPONSES TO TARGET REGIMES IN CHINESE LOCAL GOVERNMENT
| Published date | 01 December 2015 |
| DOI | http://doi.org/10.1111/padm.12197 |
| Date | 01 December 2015 |
doi : 10. 1111/p adm .12197
THE PARADOX OF PERFORMANCE REGIMES:
STRATEGIC RESPONSES TO TARGET REGIMES
IN CHINESE LOCAL GOVERNMENT
JIAYUAN LI
Numerous studies have shown that rewarding or penalizing public ofcialsfor their performance in
a mechanical fashion may have perverse effects, as evidenced by the strategic responses to imposed
targets demonstrated by those exposed to the measurement process. Focusing attention on per-
formance evaluation practices in Chinese local government, this research nds that implementing
quantitative measurement in local authorities has triggered multiple strategic responses. Drawing
on these insights from an institutional logics perspective, the study attempts to provide a theoretical
account of the underlying mechanism that has led to repeatedly observed instances of organizational
cheating.
INTRODUCTION
Strategic responses to quantitative performance measurement – an organizational phe-
nomenon in which those subjected to evaluation play games with the measurement sys-
tems to gain advantage or avoid penalties (Smith 1995; Bevan and Hood 2006) – have been
an important theme within the public administration literature. Probably due to its signif-
icant organizational implications, there have been calls to devote more scholarly attention
to the practice of public service management by numbers and its unintended consequences
(e.g. Hood 2007). In spite of the surge of interest in this topic, most of our knowledge has,
so far, been drawn from industrialized countries. As a consequence it remains unclear
whether, and to what degree, those behaviours have also occurred in the public sector
in developing countries, where a series of Western-based practices, such as performance
measurement, have been extensively imitated.
This study focuses attention on the case of Chinese local government, whose centralized
regime relies heavily on top-down target systems to control local agents (Chan and Gao
2012). In particular, the study seeks to answer the following question: confronted with
various centralized performance appraisals, what (if any) have been the gaming responses
of those subjected to target-based regimes, and why might these have occurred? Probing
such behaviours and contemplating their underlying mechanism can provide practical
knowledge that may reduce the risk of the dysfunctional consequences associated with
the introduction of quantitative performance indicators.
Moreover, the study attempts to go further and providean institutional explanation for
the repeated observation of strategic behaviours triggered by performance management.
Although previous studies have attributed organizational cheating to multiple factors,
most explanations have been characterized by an individualist framework, as reected by
the popularity of a principal–agent framework that emphasizes local agents’ self-interest
(Bevan and Hood 2006; Shin 2013; Kalgin 2014). Following this perspective, the main solu-
tion suggested for this problem has been to increase the cost of gaming and to reduce
information asymmetry by improving the design of the measurement process. However,
relegating cheating to the status of a technical and managerial problem has failed to explain
Jiyauan Li is in the School of Politics and Public Administration at Guangdong University of Foreign Studies, China.
Public Administration Vol.93, No. 4, 2015 (1152–1167)
© 2015 John Wiley & Sons Ltd.
THE PARADOX OF PERFORMANCE REGIMES 1153
why the problem persists, even though counteractive measures have been introduced in
recent years. Such a paradox calls for a deeper understanding of this organizational phe-
nomenon. As will be elaborated later, this study goes beyond a technical perspective and
attempts to identify underlying institutional forces shaping the incentives and behaviours
of local ofcials involved in gaming. The next section attempts to summarize a body of
empirical work focused on the degree of, types of and reasons for the gaming behaviours
associated with performance management.
LITERATURE REVIEW
As a pivotal element of New Public Management-inspired reform, performance man-
agement in the public sector has been portrayed as a rational approach to improving
the motivation and efciency of public ofcials (e.g. Behn 2003). There has been some
evidence supporting the positive effects generated by quantitative target regimes, such
as the reduction of hospital waiting times (Propper et al. 2010), better allocation of public
funding among government contractors (Heinrich 1999) and the promotion of economic
growth at the macro level (Zhou 2008). In spite of managerial benets produced by
indicator systems, an expanding body of studies has demonstrated that those exposed
to evaluation deploy multiple resistance strategies, a phenomenon long recognized by
organization theorists (e.g. Blau 1963).
In recent years, probably prompted by the proliferation of quantitative performance
indicators in various policy domains, the philosophy of ‘managing by numbers’ and its
unintended consequences have become a popular area of the study of performance man-
agement (Smith 1995; Bevan and Hood 2006). Hood (2006, p. 516) has developed a new
typology to classify some popular gaming responses featured in the literature, namely the
ratchet effect, the threshold effect and output distortion. A general consensus from this
strand of work is: the higher the impact of a performance measurement scheme (whether
or not the assessment produces immediate and signicant consequences for those sub-
jected to it), the less likely it is to improve internal management; or, worse, the more likely
it is to trigger perverse effects (de Bruijn 2006, p. 35).
This proposition concerning the linkage between a performance regime and its perverse
effects has been supported by empirical work carried out in other managerial contexts,
such as performance-based budgeting in South Korea (Shin 2013) and the nationwide
system of performance measurement in Russia (Kalgin 2014). As a centralized country,
China has maintained a sustained emphasis on quantitative target regimes that have taken
the form of cadre responsibility systems (hereafter CRSs), and there has been scattered
evidence that introducing various quantitative targets has diverted the attention of local
ofcials from long-term goals to short-term targets that will have an immediate impact
on their careers (Chan and Gao 2012). However, it is noteworthy that evidence on this
issue has remained anecdotal, and there has been no explicit scholarly effort devoted to
this topic.
Another question of interest to this study is how to explain the repeated observation
of strategic responses in the public sector. Although there has been growth in evidence
of gaming, developing a theoretical model predicting its occurrence is premature at best,
partly due to the sensitive character of gaming. There have been some initial efforts in
this regard. For instance, Bohte and Meier (2000) argue that organizational cheating can
be attributed to scarce institutional resources and difcult task demands. Hood (2006,
p. 520) regards inadequate verication of reported performance data as a major reason for
Public Administration Vol.93, No. 4, 2015 (1152–1167)
© 2015 John Wiley& Sons Ltd.
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