The Vertical Management and the Jurisdictional Management:the Choice of Administrative Management System in China
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| Title | The Vertical Management and the Jurisdictional Management:the Choice of Administrative Management System in China
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| Author | Yin Zhendong |
| Organization | School of Economics, Shandong University |
| Email | yinzd86@yahoo.com.cn |
| Key Words | Vertical Management; Jurisdictional Management; Local Governments; Accountability |
| Abstract | China's decentralization with political centralization and economic decentralization promotes the China's economy to grow rapidly and sustainedly, but brings in environment deterioration and frequent safety accidents etc. To alleviate these problems, the central government establishes the vertical management institution. We set up a model of contract theory to compare the vertical management institution and the jurisdictional management institution. We find that, the vertical management institution is superior in achieving vetoing the bad projects by regulatory authorities to the jurisdictional management institution and the vertical management institution can indeed mitigate the interference of local governments; but when the regulatory task is difficult to measure, the vertical management institution not only cannot change the situation of passing the bad projects by regulatory authorities in the jurisdictional management institution, but also weakens the incentives of local governments to promote economic growth, which is worse for the central government. We describe the conditions of establishing the vertical management institutions and give some implication for further development of administrative management system. |
| Serial Number | WP38 |
| Time | 2011-01-10 |
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