A new book by Alexander Libman (Ludwig Maximilian University of Munich) and Michael Rochlitz “Federalism in China and Russia: Story of Success and Story of Failure?” has been recently printed by Edward Elgar Publishing. The book analyzes center-region relations in China and Russia and seeks to explain the divergence in growth performance between the two countries. The authors offer some interesting insights into the logic of this divergence by looking closely at models of fiscal federalism in Russia and China, bureaucratic incentives and appointment criteria of regional officials, monitoring strategies and mechanisms of control over local bureaucrats, and characteristics of the local state.
They find that the countries differ in every respect: while the Chinese system has over the years emphasized growth by inducing experimentation and autonomy on the regional level, Russia has prioritized centralization of power over economic performance. They argue, however, that since Xi Jingping’s accession to power in 2012 China has begun to implement policies (e.g. a full-fledged anti-corruption campaign, abolishing the two-term presidential time limit and subsequent consolidation of authority) that are changing the incentives structure and are undermining economic growth. Thus, China seems to have departed from its focus on economic development to become more similar to Russia.