Logrolling under fragmented authoritarianism: theory and evidence from China

This paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non-democratic political system. In particular, we focus on China, where bureaucratic interest groups are separate vertical organizations reaching down from Beijing to the provinces and cities. The key question in this paper is: what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies? We address this question both theoretically and empirically. The theory predicts a specific distortion in resource allocation because of logrolling, while the empirical results confirm the theoretical prediction. We find policy outcomes under logrolling are characterized by excessive spending on all the interest groups’ preferred goods and insufficient spending on public goods. We test the existence of logrolling between the Ministry of Civil Affairs and Ministry of Health in China. Our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies.