Constraint and Semi- Planned Administration

This article explores the institutions of the Chinese semi-planned admin-istration under which the grassroots role of debtors has loomed large and made possible the transition of grassroots cadres from predators to debtors. The institutional features of the semi-panned administration—the institu-tion of target responsibility, the legacy of cost shifting, and the paternalistic care provided by the socialist state—together with related policy measures explain the pathology of budget deficits and debt problems at the grass-roots level across rural China. An investigation into the public finances of grassroots governments in Wenzhou, Wuxi, and Jianshi illuminates how the Chinese semi-planned administration has shaped individual cadres ’ calcula-tions and behavior, perpetuated their irresponsible spending, and reproduced local soft budget constraints. This article argues that without an outright revamping of the institutions of the Chinese semi-planned administration, the current practice of simply writing off rural debt through financial bailouts perpetuates soft budget constraints across the countryside. at PENNSYLVANIA STATE UNIV on May 9, 2016mcx.sagepub.comDownloaded fro