Ling Chen | Johns Hopkins University (original) (raw)

Papers by Ling Chen

International Security, 2023

Conventional wisdom holds that conflict is highly likely during a power transition between declin... more Conventional wisdom holds that conflict is highly likely during a power transition between declining and rising powers. The spread of global supply chains has provided new economic weapons for great powers waging these conflicts, but the businesses that constitute global supply chains can make it harder or easier for them to do so. A structural theory of business-state relations shows how power transitions affect a state's ability to exercise economic statecraft. As a dominant power and a rising power approach parity, they face structural incentives to use economic statecraft to decouple their economies. The resulting threat to businesses’ profits changes business-state relations: high-value businesses within the dominant power tend to oppose their state's use of economic statecraft, whereas low-value businesses within the rising power tend to cooperate with their state's use of economic statecraft. The Anglo-German power transition from 1890 to 1914 and the U.S.-China power transition since 1990 illustrate the theory. The findings shift scholarly debates on the use of economic statecraft in modern great power competition and have policy implications for weaponizing supply chains against rising powers like China.

Comparative Politics, 2023

Why are perennially entrenched institutions so hard to reform? This paper proposes a theory of in... more Why are perennially entrenched institutions so hard to reform? This paper proposes a theory of institutional rebound when implementing difficult changes. It untangles reforms in China's stateowned enterprises, which aimed to break the three "iron institutions" in leadership (iron chair), employment (iron bowl), and wages (iron wage) so as to introduce competition and raise efficiency. I argue that under the guise of new institutions, informal institutions emerge to fight back against further reforms and let old rules rebound. When actors had denser political connections, their active manipulation helped redesign rules and maintain privileges. When they had fewer political resources, they used performative resistance to delay reforms and penalize reform advocates. Implementing reforms to the former group requires tougher political battles, while the latter can be dealt with by replacing employees. The pressure of completing reforms drove SOE leaders and state cadres to initially target the latter (lower tier workers and nonstrategic sectors), who have fewer political resources. However, because of institutional rebound, the vacancies were soon replaced with the cronies of the powerful, which ironically shrank the pool of personnel that could be targeted. Over time, reforms moved to target higherlevel cadres and strategic sectors. In contrast to institutional stagnation, the paper identifies the dynamic process of institutional rebound. It also goes beyond seeing institutions in the public sector as only a matter of ownership and highlights the tenacious roots of internal rules. The paper triangulates data by combining in-depth interviews, secondary sources, and topical modeling of newspaper and journal articles across three decades.

Perspectives on Politics, 2022

There is no doubt that the political economy of contemporary China has received significant atten... more There is no doubt that the political economy of contemporary China has received significant attention both in academic disciplines and in the real world. The role of the state in the economy and the relations between government and business actors have always been central concerns of classic social science works on China. There are, however, several crucial challenges in studying this topic. The complicated landscape of a multilayered, fragmented Chinese state and numerous state-owned, private, foreign, or mixed-type businesses has made it difficult to tease out their interactions and establish a comprehensive theoretical model. The fast-changing nature of state-market relations and their vast sub-national and sectoral variation has often prevented scholars from generalizing those lessons beyond the case or issue area. Yet, among all these, the most daunting challenge is: how can studies of a particularly interesting phenomenon in China’s political economy contribute to broader discussions of state-society relations, regime durability, and state-led development without losing respectable country expertise?

International Studies Quarterly , 2022

Do more mobile firms pay lower taxes? Conventional wisdom argues that capital mobility creates do... more Do more mobile firms pay lower taxes? Conventional wisdom argues that capital mobility creates downward pressure on corporate taxes, as firms can threaten to exit. Nevertheless, empirical findings are highly mixed and hard to reconcile, partly due to a lack of data at the micro-level. Using two comprehensive panel data sets with more than 780,000 Chinese firms over two decades, we find that firms with higher shares of mobile capital pay higher effective tax rates. We contend that this counter-intuitive finding results from the strategic interaction between firms and governments. Knowing their vulnerability and sunk cost, firms with more fixed assets were more active in protecting themselves by bribing and colluding with local officials. Meanwhile, officials were more willing to seek bribes from these firms in exchange for tax cuts. In contrast, mobile firms were disadvantaged. Although capital mobility may provide additional bargaining power, firms with fixed assets can overcome this advantage through state-business collusion. Our quantitative and qualitative evidence show that fixed firms paid lower taxes in cities with cozy government-business relations. However, such advantages decreased after the launch of anti-corruption campaigns and in cities with higher fiscal transparency.

American Journal of Political Science, 2021

A rich literature has noted political business cycles in democracies. We argue that in an autocra... more A rich literature has noted political business cycles in democracies. We argue that in an autocracy with strong bureaucratic institutions, the pressure of evaluation and promotion has also generated political cycles of tax-break policies. Furthermore, the timing and content of the evaluation have driven leaders to use tax breaks strategically to build economic performance, producing distributional consequences. Combining panel data of 1,510,153 firm-year observations, city-leader data from 1995 to 2007, and field interviews, we find that the tax-break rates dropped for most firms during mayors' turnover years. In the first year of office, that is, the "busy year," mayors needed to prioritize large firms and especially large foreign firms. Small domestic private firms bore the cost of tenure cycles. In the last year of the mayors' tenure, that is, the "dust-settled" year, there was little incentive to seek promotion, and even important firms could not gain the mayors' attention.

Perspectives on Politics, 2020

World Development, 2017

How does a globalized context influence domestic development policies and the allocation of gover... more How does a globalized context influence domestic development policies and the allocation of government resources in an authoritarian country like China? This study explores the coalitional politics in China's transition from foreign direct investment (FDI) attraction to domestic technology upgrading, which created winners and losers in the local allocation of government resources. Drawing on comparative case studies, semi-structured interviews and newly compiled data across 300 cities, the study finds that the varied levels of government support for domestic upgrading are shaped by coalitions for or against the transition. The major obstacle for bureaucrats within a city government to garner resources for domestic technology does not directly depend on the overall level of FDI. Rather, it comes from the vested interest of international commerce bureaucrats. These bureaucrats are more likely to form a cohesive coalition when the export share of foreign firms is large. At the same time, such a coalition is more likely to gain political influence when industrial sales are concentrated in large firms. The direction and magnitude of foreign capital influence, therefore, is channeled and manifested through local bureaucratic coalitions. This study sheds light on the politics of implementing development policies in an era in which globalization has cultivated fragmented interests within the local bureaucracy.

Review of International Political Economy , 2008

New Political Economy, 2008

Drafts by Ling Chen

Books by Ling Chen

Stanford University Press, 2018

The era of globalization saw China emerge as the world's manufacturing titan. However, the "made ... more The era of globalization saw China emerge as the world's manufacturing titan. However, the "made in China" model—with its reliance on cheap labor and thin profits—has begun to wane. Beginning in the 2000s, the Chinese state shifted from attracting foreign investment to promoting the technological competitiveness of domestic firms. This shift caused tensions between winners and losers, leading local bureaucrats to compete for resources in government budget, funding, and tax breaks. While bureaucrats successfully built coalitions to motivate businesses to upgrade in some cities, in others, vested interests within the government deprived businesses of developmental resources and left them in a desperate race to the bottom.

In Manipulating Globalization, Ling Chen argues that the roots of coalitional variation lie in the type of foreign firms with which local governments forged alliances. Cities that initially attracted large global firms with a significant share of exports were more likely to experience manipulation from vested interests down the road compared to those that attracted smaller foreign firms. The book develops the argument with in-depth interviews and tests it with quantitative data across hundreds of Chinese cities and thousands of firms. Chen advances a new theory of economic policies in authoritarian regimes and informs debates about the nature of Chinese capitalism. Her findings shed light on state-led development and coalition formation in other emerging economies that comprise the new "globalized" generation.