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Improving State Effectiveness by Discouraging Civil Servants from Flattering Their Leaders
Alain de Janvry, Guojun He, Elisabeth Sadoulet, Shaoda Wang, Qiong Zhang, Mar 11, 2020Evaluation of public employees performance is essential to induce higher work efforts. We use an experiment in two provinces of china to explore how to design such evaluation. Results show that the incentive effect of evaluation can be larger if the employee does not know ex-ante who the evaluator will be, thus reducing attempts at personally influencing the evaluator and enhancing instead job achievements.
Finance Leases: A Hidden Channel of China’s Shadow Banking System
Jinfan Zhang, Ting Yang, Yanping Shi, Nov 11, 2020We find that banks use their affiliated leasing firms to provide credit to constrained clients in order to circumvent the government’s targeted monetary tightening policy, which offsets the expected decline in traditional bank loans in overcapacity industries and hampers the effectiveness of the monetary policy. Although this regulatory arbitrage may cause systemic risk at the macro level, bank-affiliated leasing firms...
From Fog to Smog: The Value of Pollution Information
Panle Jia Barwick, Shanjun Li, Liguo Lin, Eric Zou, Feb 05, 2020During 2013–2014, China launched a nation-wide real-time air quality monitoring and disclosure program, which was a watershed moment in the history of its environmental regulations. We present the first empirical analysis of this natural experiment by exploiting its staggered introduction across cities. The program substantially expanded public access to pollution information, and in turn, triggered a cascade...
Price Discovery and Market Segmentation in China’s Credit Market
Zhe Geng, Jun Pan, Apr 08, 2020The recent unprecedented wave of bond defaults in China has captured the attention of investors worldwide. We document a severe segmentation between the pricing of state-owned enterprise (SOE) and non-SOE bonds that arises sharply post 2018. Using our default measure, we find that this market segmentation is not driven by the fundamentals of the firms. We also show that this market segmentation has also caused...
Misallocation, Selection, and Productivity: A Quantitative Analysis with Panel Data from China
Tasso Adamopoulos, Loren Brandt, Jessica Leight, Diego Restuccia, Jan 05, 2022We examine the distorting effects of China’s land institutions on aggregate agricultural productivity and other outcomes. We argue these distortions affect two key margins: (1) the allocation of resources across farmers (misallocation); and (2) the type of farmers who operate in agriculture (selection).
