Target Setting in Tournaments: Theory and Evidence from China

Target Setting in Tournaments: Theory and Evidence from China

Abstract Motivated by the prevalence of economic targets at all levels of territory administration in China, this article proposes a Tullock contest model to study optimal target setting in a multi-layered tournament-based organisation. In our model, targets are used by upper-level officials to conv...

Full description

Saved in:
Bibliographic Details
Published in:The Economic journal (London) 2019-10, Vol.129 (623), p.2888-2915
Main Authors: Li, Xing, Liu, Chong, Weng, Xi, Zhou, Li-An
Format: Article
Language:eng
Subjects:
Economic growth
Jurisdiction
Public administration
Subordinates
Tournaments
Tournaments & championships
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Abstract Motivated by the prevalence of economic targets at all levels of territory administration in China, this article proposes a Tullock contest model to study optimal target setting in a multi-layered tournament-based organisation. In our model, targets are used by upper-level officials to convey the importance of economic growth and incentivise subordinates in the tournaments. Our model predicts a top-down amplification of economic growth targets along the jurisdiction levels, which explains the observed pattern in China. Using both provincial and prefectural-level data, we test the model predictions and find consistent evidence.
ISSN:0013-0133
1468-0297