A Road Next to Democracy

1. A Road Next to Democracy Jiahua CHE@CUHK Based on my working paper "A Road Next to Democracy" (2008)

2. Good economic policies require good governments, good governments require good mechanisms to establish them • China’s communist party faces no political competition and is usually considered as dictator • Yet, without democracy, without political competition • Why did the communist party of China embrace market reform? • Why was the communist party of China able to have a successful reform for three decades? • Why was the reform beneficial to the majority of the Chinese? • Why do the Chinese people think the nation is going in the right direction (86%), but at the same time most concerned about bureaucratic corruption (78%， 39%)

3. Premises of existing approaches • People are self-interested, politicians no exception • Politicians seek rent but long-term prospect of staying in power (to grab rent in the future) may offer incentives • Threat of being out of power (election/promotion): career concern • Being allowed to stay in power forever • A different approach: • Regime of many short-term governments with one succeeding another • Electing as selection instead of providing incentives

4. Premises of the different approach: • It is possible to have a “good” government not seeking rent • Most but not all are self-interested, there are “good” people fit to govern • Key: regime is a mechanism of government succession: electing “good” people to govern, one “good” government after another • Difficulty: information asymmetry • Different regimes addressing the difficulty differently • Democracy: bottom-up election (by general public) • Self-election: top-down(禅让)

5. China’s Communist Party Regimeas aSelf-Electing Succession Mechanism

6. Self-election and dictatorship: • Majority of stake-holders are not involved in electing the government • But self-election is more common than democracy in human societies • Feudal dynasties • Corporate leaders • Religious leaders • Journal editors

7. Pros and cons between self-election and democracy: • Self-replication (most people are self-interested) • Raising the threshold of candidates for governing (electing the pope) • Ensuring continuity of social engineering • Polarizing performance: one bad government leads to another

8. Understanding China’s communist party regime • The hierarchy and the society • Core • Power level • Grass-root level • General public: most are self-interested, with a minority of “good” ones Party

9. Core: • Collective leadership • Term limit • Overlapping generation

10. Power level with a pyramid hierarchy • Rank-wise promotion: no fast track • Evaluation at every rank • 监察，纪检，巡视，信访，上访 • Role of providing incentives • Term limit, job rotation, and mandatory retirement • Creating space for promotion

11. Grass-root level: as reserve army • Early admission • Voluntary work • Amateur party member • Open access: people’s party

12. Equilibrium:腐而未败 (corrupted sustainability) Core Power level Grass-root level General public

13. China’s communist party regime as a self-electing succession mechanism • Internal logic • Electing good people under information asymmetry • Ensuring the continuity of social engineering • First step to understanding China’s political system • Exploring the maximum potential of self-electing succession mechanism • Shedding light on the future of China’s political reform and the reform of China’s communist party