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Collective Leadership, Career Concern, and the Housing Market in C hina: The Role of Standing Committees
Author(s) -
Gao Nan,
Long Cheryl Xiaoning,
Xu Lixin Colin
Publication year - 2016
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12202
Subject(s) - gross domestic product , real estate , endogeneity , economics , politics , per capita , communism , incentive , panel data , labour economics , finance , market economy , economic growth , law , political science , sociology , population , demography , econometrics
Despite an emerging literature on political determinants of economic performance, little is known about whether standing committees of the Communist Party, an institution of collective leadership, matter for economic development. Using Chinese provincial‐level panel data, we find that a higher ratio of new members in the standing committee of the local Communist Party is correlated with a higher housing sales/gross domestic product ( GDP ) ratio. Moreover, more new members in the standing committee are also associated with a lower level of GDP per capita and a lower manufacturing output growth rate. The results on the size of the real estate sector are robust to dealing with the endogeneity of the ratio of new standing committee members. Our findings suggest that career incentives of party leadership affected real estate development at the expense of manufacturing growth in the locality, and that the structure of collective leadership has important economic consequences.