UCLA Asia Institute

Why did China's national authority (the center) allow some provinces to adopt deeper urban reforms than others? This paper evaluates alternative answers found in political-economic literature. My data analyses suggest that the center, in implementing urban reforms in the provinces, primarily tried to increase revenue income. The center also attempted to garner political support from the rural consumers and surplus labor, and generate higher returns from material inputs in the provinces. Interest groups appear to be irrelevant. This conclusion is reached by testing the growth, revenue, political-support, and interest-group explanations for different extents of provincial involvement in urban reforms.