Journal Article: "How Chinese Local Governments Respond to Competing Targets: Evidence from the COVID-19 Epidemic"

Title: How Chinese Local Governments Respond to Competing Targets: Evidence from the COVID-19 Epidemic

Authors: Lang Kun, Alexander X. Li, Shaobo Long

Language: Chinese

Publication: Applied Economics, September 2025, Vol. 57, 0003-6846: 1-16

English Abstract:

This article examines how Chinese local governments respond to competing policy targets during crises, using the COVID-19 epidemic as a quasi-natural experiment. We construct a novel panel dataset covering 278 prefecture-level cities in China to investigate whether city leaders’ promotion incentives – measured by tenure and age – affect their performance in epidemic control and economic development. Employing difference-in-differences and fixed effects regressions, we find no significant variation in epidemic control outcomes across officials with different tenures or ages. However, during the COVID-19 epidemic, cities governed by short-tenure leaders experienced a 0.84% point higher GDP growth rate compared to those led by long-tenure officials. Furthermore, the impact of officials’ promotion incentives on GDP growth was particularly pronounced among older officials, in northern regions, and after the epidemic was brought under control. These results suggest that competing policy targets may generate unintended performance distortions for local officials, particularly among leaders with lower promotion incentives.

Keywords: Local Government; Competing Targets; Promotion Incentive; Epidemic Control; GDP Growth