From Taxation to Expropriation: The Politics of Excessive Extraction in China
Abstract/Contents
- Abstract
- Many countries excessively tax firms and farmers to the extent of ruining incentives. Studies on expropriation, however, focus on cross-national variation in the nationalization of land and foreign firms; as a result, we know little about how excessive extraction—a subtle but perhaps more prevalent form of expropriation—occurs. I study the case of China, where entrepreneurs frequently complain about the excessive extraction of taxes and non-tax fees by local governments. I examine how local party-state leaders’ stronger career incentives lead to increased and excessive extraction by using both qualitative and quantitative methods. I elaborate on the specific mechanisms linking local leaders’ career incentives to the extraction of taxes and that of non-tax fees, respectively. I show how excessive extraction has actually happened by analyzing qualitative materials such as newspapers and writings by finance journalists. Quantitatively, using a large firm-level dataset and firm fixed effects models, I find that the intensity of extraction from firms systematically varies with local officials’ career incentives. Prefectural governors who come to office with patronage ties to their superiors have strong career incentives and strategically increase the extraction of local taxes and fees during their early years in office. By linking taxation to expropriation, this paper sheds new light on how unchecked political power undermines property rights.
Description
Type of resource | text |
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Date created | June 4, 2020 |
Creators/Contributors
Author | Min, Jie | |
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Degree granting institution | Stanford University, Stanford Global Studies, Center for East Asian Studies | |
Primary advisor | Oi, Jean C. |
Subjects
Subject | Taxation |
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Subject | Expropriation |
Subject | Excessive Extraction |
Subject | State-Business Relations |
Subject | Chinese Politics |
Genre | Thesis |
Bibliographic information
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- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
Preferred citation
- Preferred Citation
- Min, Jie (2020). From Taxation to Expropriation: The Politics of Excessive Extraction in China. Stanford Digital Repository. Available at: https://purl.stanford.edu/yk436bp9299
Collection
Stanford Center for East Asian Studies Thesis Collection
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- jerryjiemin@outlook.com
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