Essays on Political Economy

This dissertation is a collection of essays focused on understanding: (1) the strategic interactions related to censorship; and (2) the force behind changes across time in public policies, including emigration policies and governmental structures, in autocracies. Essay 1 theoretically and empirically analyzes censorship on social media platforms in China. If the government sets a higher tax rate for the next tax year, it will benefit more from the profit made by the company. Hence the government has weaker incentives to punish the company in case of disobedience. Therefore, the company has weaker incentives to comply with the government's order to censor sensitive content. The effort of censorship may be all in vain due to the paradox of censorship: The more the censor suppresses whatever the censor dislikes, the more attention that disliked subject receives. Essay 2 explains how the censor strategically times censorship when considering that it may backfire. In equilibrium, if the censor stops the discussion about a piece of news and the learning process sooner, the receiver believes he is more likely a bad type. Essay 3 uses an infinite-horizon principal-agent model to explore the interaction between the hierarchical structures of governments and the career concerns of local officials in China. This paper shows that there exists a vertical structure that dominates all horizontal structures. Vertical structures generate less uncertainty in the promotion process and hence a clearer career path than horizontal structures. Therefore, vertical structures are more efficient in incentivizing local officials to work. Essay 4 explains why autocrats and dictators draft the emigration policy so that emigration is sometimes easy for citizens, sometimes almost impossible. There are clear gains in opening the floodgates: If more citizens leave the country, fewer citizens will participate in revolutionary activities, making it more likely for the government to remain in power. Under certain conditions, this improvement in stability dominates the loss in GDP caused by emigration