Local Government Entrepreneurship: Public Goods, Public Risks and Public Administration

Decentralisation reform in China has provided a foundation that pitches local government officials against each other in their pursuit of individual career goals and tasks to meet their annual growth targets. To deliver public goods to their constituencies, local officials turn themselves into entrepreneurs and compete through entrepreneurial policies or innovative implementation of central policies. Different from corporatism’s prediction, local government entrepreneurship does not necessarily provide long-term macroeconomic planning or improve long-term regional economic performance. Also, unlike federalism’s prediction, local government entrepreneurship does not always improve responsible fiscal management, and neither are all local projects revenue-driven. Based on the choice-theoretic tradition, the perspective of administrative choice provides a fuller understanding of why and how local government entrepreneurship takes place in China.