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Centralized Corporate Governance and Decentralized Taxation: Local Problems of Systemic Reform of State-Owned Enterprises in the PRC
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Abstract:
An inveterate problem of management of state-owned enterprises in China has centered on the overlapping jurisdictions of ministerial and local governmental officials over the basic economic decisions of enterprises. This deliberate control design aimed to maximize the incorporation of social and political priorities in production units, at the expense of efficiency and managerial autonomy. With the radical restructuring of key public-sector enterprises in late-1990s, the central state has attempted to simplify the complex principal-agent relations through centralized corporate governance or privatization, often resulting in the crowding out the local state stakeholding in these firms. Drawing from interviews of managers and local officials in oilfields and petrochemical plants in four regions of China, I demonstrate that enterprise reform in regions with limited growth potentials outside of the state-owned sector has generated increasing central-local contentions over regulatory issues including taxation, rules of the market, access to stock markets, and land and labor usage, etc. These contentions have arisen from an emerging structural discrepancy between firm-level stakeholding and subnational fiscal relations. While local officials might have political and long-term fiscal incentives to cooperate with the center in creating a supportive regulatory environment for enterprise reform, the immediate disruption of their tax base and shareholding roles often lead to various manners of noncompliance and deleterious extractive measures. I argue that, without giving local governments new tax bases and capacities under a fiscal federalist structure, recentralizing Beijing’s ownership control over the state sector is not likely to be effective. My findings contribute to the emerging literature on types of multi-level economic governance, including the conceptual works of Gourevitch and Shinn (2003) and Hooghe and Marks (2003).
Most Common Document Word Stems: local (129), state (80), enterpris (68), soe (55), govern (53), market (52), compani (46), oil (46), manag (42), central (41), reform (39), develop (37), million (35), tax (32), fiscal (32), rmb (32), firm (31), provinc (30), relat (30), industri (29), offici (29),

Author's Keywords: Post-socialism, industrial organization, China, taxation, federalism, oil, regional economics, public administration, privatization, market reform.	Convention All Academic Convention can solve the abstract management needs for any association's annual meeting. Submission - Custom fields, multiple submission types, tracks, audio visual, multiple upload formats, automatic conversion to pdf. Review - Peer Review, Bulk reviewer assignment, bulk emails, ranking, z-score statistics, and multiple worksheets! Reports - Many standard and custom reports generated while you wait. Print programs with participant indexes, event grids, and more! Scheduling - Flexible and convenient grid scheduling within rooms and buildings. Conflict checking and advanced filtering. Communication - Bulk email tools to help your administrators send reminders and responses. Use form letters, a message center, and much more! Management - Search tools, duplicate people management, editing tools, submission transfers, many tools to manage a variety of conference management headaches! Click here for more information.
Association: Name: American Political Science Association URL: http://www.apsanet.org
Citation: URL: http://www.allacademic.com/meta/p59720_index.html Direct Link: HTML Code:

Lin, Kun-Chin. "Centralized Corporate Governance and Decentralized Taxation: Local Problems of Systemic Reform of State-Owned Enterprises in the PRC" Paper presented at the annual meeting of the American Political Science Association, Hilton Chicago and the Palmer House Hilton, Chicago, IL, Sep 02, 2004 <Not Available>. 2008-10-10 <http://www.allacademic.com/meta/p59720_index.html>

Lin, K. , 2004-09-02 "Centralized Corporate Governance and Decentralized Taxation: Local Problems of Systemic Reform of State-Owned Enterprises in the PRC" Paper presented at the annual meeting of the American Political Science Association, Hilton Chicago and the Palmer House Hilton, Chicago, IL Online <.PDF>. 2008-10-10 from http://www.allacademic.com/meta/p59720_index.html

Publication Type: Conference Paper/Unpublished Manuscript Review Method: Peer Reviewed Abstract: An inveterate problem of management of state-owned enterprises in China has centered on the overlapping jurisdictions of ministerial and local governmental officials over the basic economic decisions of enterprises. This deliberate control design aimed to maximize the incorporation of social and political priorities in production units, at the expense of efficiency and managerial autonomy. With the radical restructuring of key public-sector enterprises in late-1990s, the central state has attempted to simplify the complex principal-agent relations through centralized corporate governance or privatization, often resulting in the crowding out the local state stakeholding in these firms. Drawing from interviews of managers and local officials in oilfields and petrochemical plants in four regions of China, I demonstrate that enterprise reform in regions with limited growth potentials outside of the state-owned sector has generated increasing central-local contentions over regulatory issues including taxation, rules of the market, access to stock markets, and land and labor usage, etc. These contentions have arisen from an emerging structural discrepancy between firm-level stakeholding and subnational fiscal relations. While local officials might have political and long-term fiscal incentives to cooperate with the center in creating a supportive regulatory environment for enterprise reform, the immediate disruption of their tax base and shareholding roles often lead to various manners of noncompliance and deleterious extractive measures. I argue that, without giving local governments new tax bases and capacities under a fiscal federalist structure, recentralizing Beijing’s ownership control over the state sector is not likely to be effective. My findings contribute to the emerging literature on types of multi-level economic governance, including the conceptual works of Gourevitch and Shinn (2003) and Hooghe and Marks (2003).

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