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Modes of Governance in the Chinese Bureaucracy: A “Control Rights” Theory
Working Paper

Drawing on insights from recent economic theories of incomplete contracts and property rights, we develop a theoretical model on authority relationships in the Chinese bureaucracy by conceptualizing the allocation of control rights in goal setting, inspection and incentive provision among the principal, supervisor and agent. Variations in the allocation of control rights give rise to different modes of governance and entail distinct behavioral implications among the parties involved. The proposed model provides a unified framework and a set of analytical concepts to examine different governance structures, varying authority relationships, and behavioral patterns in the Chinese bureaucracy. We illustrate the proposed model in a case study of the authority relationships and the ensuing behavioral patterns in the environmental protection arena over a 5-year policy cycle.

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