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The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program †

The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling”... Abstract We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of “death ceilings” that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings. (JEL D73, J28, J45, J81, O15, P26, P36 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Applied Economics American Economic Association

The Distortionary Effects of Incentives in Government: Evidence from China's “Death Ceiling” Program †

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Publisher
American Economic Association
Copyright
Copyright © 2017 by the American Economic Association
Subject
Articles
ISSN
1945-7790
eISSN
1945-7790
DOI
10.1257/app.20160008
Publisher site
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Abstract

Abstract We study a 2004 program designed to motivate Chinese bureaucrats to reduce accidental deaths. Each province received a set of “death ceilings” that, if exceeded, would impede government officials' promotions. For each category of accidental deaths, we observe a sharp discontinuity in reported deaths at the ceiling, suggestive of manipulation. Provinces with safety incentives for municipal officials experienced larger declines in accidental deaths, suggesting complementarities between incentives at different levels of government. While realized accidental deaths predict the following year's ceiling, we observe no evidence that provinces manipulate deaths upward to avoid ratchet effects in the setting of death ceilings. (JEL D73, J28, J45, J81, O15, P26, P36 )

Journal

American Economic Journal: Applied Economics – American Economic Association

Published: Apr 1, 2017

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