Cohorts, Competition and Construction : Economic Performance, Land Expropriation and Bureaucrat Promotion in China

We identify the causal effect of career incentives on bureaucrat performance by exploiting the ex ante competitiveness of promotions. Using detailed data on the career histories of top bureaucrats in all Chinese prefectures between 1996 and 2014, we show that bureaucrats with fewer competitors have a greater likelihood of promotion. This incentivises them to adopt a strategy that relies on real estate investment and rural land expropriation, resulting in faster growth in construction and GDP. We present suggestive evidence that the same incentives result in lower investment in education, public transport and health. We corroborate our findings using survey and remote sensing data, and show that land expropriations are associated with adverse outcomes for expropriated individuals, with subsequent arrests of local officials, and with the emergence of “ghost cities”