Window Dressing in the Public Sector: A Case Study of China’s Compulsory Education Promotion Program
We examine window dressing phenomenon in the public sector by studying the strategic responses of Chinese local officials to the compulsory education promotion program launched by the central government in the 1990s. According to this program, the Chinese counties should receive inspections on whether the compulsory educational targets were achieved on pre-scheduled time by provincial governments; and failing to pass the inspection would have severe negative career consequences for the county leaders. We find that county-level educational expenditures saw a sustained increase before the inspection, but a sharp drop immediately after the inspection. Local officials who were more likely to be inspected within their tenures window-dressed more aggressively. As a result, middle school enrollment rates declined significantly after the inspection, and rural girls bore the blunt of the decline in school enrollment.
We thank seminar participants at Princeton University, Penn-UCSD Conference on Chinese Political Economy, and Peking University for valuable comments and suggestions. All errors remain ours. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.