Chinese Journal of Sociology

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Administrative Subcontract

  

  1. ZHOU Li-An，Guanghua School of Management，Peking University
  • Online:2014-11-20 Published:2014-11-20
  • Contact: ZHOU Li-An，Guanghua School of Management，Peking University E-mail:zhoula@gsm.pku.edu.cn

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Abstract: Abstract： This paper attempts to demonstrate the significance, relevance and implications of “administrative subcontract” as an analytical framework to understand China’s intergovernmental relations, bureaucratic incentives, and administrative governance. As an ideal type, administrative subcontract refers to a subcontracting relation inside the government system, represent a hybrid governance structure between bureaucracy in a Weberian sense and pure subcontract which occurs among independent entities without any hierarchical relations. Administrative subcontract exhibits a coherent and consistent set of characteristics along the dimensions of authority relations, economic incentives, and internal control. With respect to authority relations, administrative subcontract features an allocation of authority between the principal and agent where the principal has the formal authority and residual control rights (such as the authority to appoint/remove, supervise and monitor subcontractors and the option to intervene when necessary), and the agent, by way of subcontracting, enjoys considerable discretion and de facto power to do things in his own way. Under the administrative subcontract regime, the agent is a residual claimant over the budget money or revenues either collected through serviceprovision or allocated by the principal. In terms of internal control, the administrative subcontract is outcomeoriented rather than procedure/processoriented. I argue that these three dimensions are complementary and mutually supportive, and tend to commove if the system encounters systematic shocks. This new framework helps us pin down the key and durable features of China’s intergovernmental relations and administrative governance. The notion of administrative subcontract enables us to reinterpret many puzzling observations and patterns regarding the workings of China’s government system and to bring some important and yet long understudied issues to our attention. I will also combine the theory of administrative subcontract with that of political tournaments to extend our analysis of China’s political incentives and governance. From the viewpoint of vertical subcontracting and horizontal (political) competition inside the government system, I attempt to explain the strength and weakness of China’s state capacity in various areas of public services.