Jingcheng Jiang

Can anti-corruption enforcement improve allocative efficiency when political connections distort industrial policy? Exploiting China's 2013 anti-corruption inspections as a plausibly exogenous shock, I show that enforcement reduced subsidies to hometown-connected firms, with effects concentrated entirely on opaquely described allocations while transparent subsidies remained unaffected. This pattern reveals politicians curtailing corrupt rather than legitimate transfers when monitoring intensifies. Reductions operate primarily through behavioral change among continuing leaders as hometown favoritism transforms from career asset to career liability, disrupting clientelistic equilibria. Despite lower subsidies, regional productivity increases as resources reallocate from politically connected to more productive firms, with gains concentrated among smaller enterprises previously crowded out by larger incumbents in politicians' hometowns. These findings demonstrate a pattern consistent with politicians optimizing under enforcement constraints: when detection costs rise, corrupt transfers decline, career incentives reverse, and efficiency improves as misallocated resources flow toward productive firms, illuminating both how political connections generate substantial misallocation and the institutional mechanisms that restore competitive dynamics.

Competition among subnational governments generates internal trade barriers, fragmenting markets within nominally integrated economies. In China's decentralized system, where provincial authorities evaluate city leaders on relative economic performance, politicians face incentives to maximize locally appropriable gains while minimizing spillovers to rivals. Exploiting exogenous variation in promotion incentives driven by the age of city party secretaries (1996–2018), I show that intensified within-province competition significantly reduces inter-city trade flows, dampens international exports, and restricts firm access to intermediate inputs. Under competitive pressure, politicians reallocate resources toward non-tradable sectors, specifically real estate, while underinvesting in connective infrastructure near jurisdictional borders. I develop a spatial general equilibrium model with endogenous trade costs where politicians choose infrastructure, subsidies, and land provision. Calibrating the model to Chinese provincial data reveals infrastructure accounts for 60% of the competition-trade relationship, and eliminating competition would increase aggregate welfare by 2.8%.

Can policy-induced uncertainty over labor supply permanently redirect the direction of technological change? We answer this question by documenting an unintended consequence of China's zero-COVID policy: by blocking hundreds of millions of migrants from reaching urban manufacturing centers, mobility restrictions triggered a sudden labor supply collapse of nearly 60% in survey data and accelerated automation investment. We find that migrant-dependent counties see post-COVID growth in robotics patents but no change in total patenting, confirming targeted labor-saving innovation rather than a generalized R&D response. The automation response is concentrated in counties with tight labor markets, where missing migrants could not be substituted by local workers, consistent with binding quantity constraints rather than gradual price changes as the operative mechanism. We rule out alternative explanations based on social distancing, export surges, local industrial policy, and demand-side shocks. Migrant workers bear the bulk of the adjustment costs, experiencing persistent income declines and transitions into informal employment. Our findings demonstrate that transient mobility restrictions can generate permanent industrial upgrading by redirecting technological change when labor constraints bind.

We document a new failure mode of trade-led development. Standard theory predicts that expansions in skill-intensive sectors raise returns to skill and induce human capital investment. Using a Bartik shift-share design that interacts predetermined regional cropping patterns with international commodity price deviations, we test this prediction in rural China after agricultural trade liberalization and find it fails. Cash crop booms, though concentrated in skill-intensive production, generate no rise in the skill premium and no schooling response. The operating mechanism is propagation failure: specialized skills and bundled inputs required for cash crop production block entry, so trade rents are captured entirely by incumbents and never spill into broader labor markets. Staple crop shocks, by contrast, raise returns across a wide range of households and depress schooling through a standard opportunity cost channel. When trade rents bypass rural labor markets, agricultural liberalization widens the human capital gap — not from unusual frictions, but from a structural feature of skill-intensive sectors.

This paper identifies political career horizons as a quantitatively important driver of China's retreat from trade. I develop a framework in which career concerns and central-local belief updating jointly shape local land allocation. New politicians subsidize industrial land to build a tradable tax base and signal competence to the center, which rewards them with transfers. As tenure lengthens, the politician's investment horizon shortens and the center withdraws transfers, reallocating land toward non-tradable residential use. A panel of Chinese cities yields three stylized facts consistent with the theory: an industrial-residential price gap that closes with tenure, a falling industrial share of land sales, and declining central transfers. A calibrated multi-region spatial equilibrium model attributes 30 percent of interregional trade decline and 25 percent of export contraction to this mechanism.

Standard gravity models predict that proximity fosters trade, yet international relations theory suggests proximity breeds conflict. This paper formalizes the security externality of international trade to resolve this tension. Using data on trade flows, alliances, and disputes, I document a near-rivalry paradox: proximity lowers transport costs but sharply increases conflict probability, creating a tradeoff between efficiency and security. I show that ideological alignment is the critical mechanism unlocking regional integration. Exploiting exogenous leader turnovers that generate sharp shifts in bilateral ideological distance, I find these shocks disproportionately affect trade between proximate pairs. A network formation model rationalizes these findings: proximity amplifies the security risk of trade, generating a commitment problem, while ideological affinity signals peaceful intent, unlocking high returns from low gravity costs. Calibration reveals ideological distance acts as an 8% tariff between rivals, and counterfactuals show ideological fragmentation would sever the most efficient short-distance trade links.