Taxation and State Building Contradiction: Grassroots State Reconfiguration under Tax State Transition in Rural China

Visiting Scholar Talks

Oct 13, 2022 | 11:00 AM

Common Room (#136), 2 Divinity Avenue, Cambridge, MA,


Changdong Zhang | Professor, Department of Political Science, School of Government, Peking University; HYI Visiting Scholar, 2022-23


Elizabeth J. Perry | Henry Rosovsky Professor of Government; Director, Harvard-Yenching Institute

In-person talk – Seating is limited. Masks are required for all audience members.

Co-sponsored with the Fairbank Center for Chinese Studies

Taxation is regarded as an important dynamic in state building, and plays a crucial role in driving the process of bureaucratization. However, this process could be contradictory under certain circumstances. Through an in-depth examination of taxation and state building in rural China, we find that the state strategically uses different institutional building strategies in different periods to penetrate the rural society for different purposes. We develop a two by two matrix by combining concentration and centralization, as a typology of micro institutional building strategies, to describe the evolution of institutional strategies and cadre’s roles. Specifically, we find that after the market transition in 1980s and 1990s, the tax state transition, especially the abolition of agricultural taxes in early 2000s, marks a transition from penetration for extraction to non-penetration with non-extraction. Using unique datasets which combines individual, village and county/province level data, we focus on the dynamic on the role of village cadres which reflects the evolution of institutional strategies. We test the hypotheses of village cadres’ income (dis)advantage before and after abolition of agriculture taxes which depended on village or upper-level government fiscal conditions, respectively. We find that before the tax state transition village cadres as tax farmers had income advantages over ordinary peasants regardless the village and county fiscal conditions. But after the transition they turned to semi-bureaucrats and lost their income advantage in most regions all over China. They only held advantages in those fiscally-rich regions. This research indicates that the state building in rural China is associated with the ending of taxation power rather than a development of taxation capacity which led to state involution. This study contributes to taxation and state building literature by revealing this contradiction, and complement to the market transition debate by bringing taxation back in.

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