Abstract: A significant character of the Chinese state governance is the structure of tiao (vertical lines of authority from top down) and kuai (horizontal levels of authority of the territorial government) and the constant adjustment of the relationship between the two. Varies studies on state governance in China either neglect this character or frame the discussion in the way of central vs local authority. This brings us to an unanswered question of how to explain the formation and evolution of tiao-kuai relationship. This paper argues that the conflicts between the tasks undertaken by tiao and kuai are largely responsible for shaping the relationship. Often the central government assigns subordinate authorities multiple tasks that conflict with one another,a factor that dictates the degree of integration between tiao and kuai. The data collected from six oil field citiessupport the argument that the less compatible of the tasks between the two,the more clashes occur. Our study confirms the multi-task principal-agent theory. The tiao-kuai structure is an attempt by the central government to resolve the paradox between centralized authority and effective local governance while trying to achieve multiple development targets. It is hoped that this study will stimulate further theoretical discussion of the inherent contradiction of a centralized government and a better understanding of the institutional arrangement of the tiao-kuai structure.

Key words: tiao-kuai relation, minefield authority, local government, multi-task principal-agent problem