The profit-driven welfare state in China : public housing in two prefecture-level districts

Abstract

What drives the expansion of social programs under an authoritarian regime? Why is welfare spending growing so rapidly in China in the early 21st century? How can the remarkable local variations in welfare provision in the world’s largest developing country today be explained? This dissertation investigates these questions through a careful, in-depth empirical study of China’s local welfare housing programs. Drawing upon intensive fieldwork in two prefecture-level districts in southwest China from 2014 to 2017, this dissertation explores the driving force behind the dramatically increasing investment in public housing construction in local China, and the rationale, design and operation of welfare housing programs at the grassroots level.

The author proposes a “profit-driven welfare state” in which the local governments maneuver welfare state programs to raise fiscal revenue, to explain China’s burgeoning social welfare system. This unique manifestation of the welfare state includes at least four aspects: first, a logic of revenue maximization; second, fiscal pressure of the local government is a key constraint that shapes welfare strategies; third, the providers of profit-driven welfare exhibit two patterns of welfare provision characterized by investment-orientation and opportunism; and fourth, the performance review of political cadres provides institutional incentives for the profit-driven welfare state.

By exploring the set of specific dynamics and strategic calculations underlining the manoeuvres of welfare housing operations in China, this dissertation contributes to broadening the theoretical horizon of the modern welfare state in three ways. First, it explains the sustained growth and robustness of China’s investment in social welfare programs against the global tide of welfare state retrenchment. Second, it provides an explanatory framework to understand the remarkable variations in the operation of social welfare programs at the local level. Last but not least, the profit-driven welfare state suggested in this dissertation sheds light on a neglected economic logic and utilitarian rationale behind the social welfare provision in a nondemocratic institutional context such as that of China.