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By Root 444 0

in declining performance of the state and the regime in executing the basic functions of government. But as with fiscal deficits, the immediate adverse impact of rising governance deficits may be more difficult to measure. A regime’s ability to tolerate rising governance deficits may be similar to a national treasury’s ability to absorb the effects of mounting budgetary deficits. In theory, a political system’s capacity to tolerate governance deficits should be much greater than a treasury’s ability to tolerate budgetary deficits. After all, any nation’s ministry of finance must go to the market to issue bonds to cover the budgetary deficits, or risk high inflation through printing paper money. Given the discipline imposed by the market, there is a finite limit to a state’s ability to finance budgetary deficits.

In comparison, as poor, even dismal, governance is found in a large number of developing countries, a society’s capacity to tolerate governance deficits may be highly elastic, In most cases, only the availability of a credible political alternative would limit a society’s tolerance of bad governance. Nevertheless, governance deficits do matter. To the extent that accumulation of such deficits progressively weakens the capacities of the state and the ruling regime, growing governance deficits can contribute to the increase in systemic risks in a political system. Such risks may ordinarily have little visible effect on the stability of a given political regime. But the existence and constant increase of these risks will, in the long run, reduce the resilience of the regime and threaten its durability.

In this chapter, I first describe and analyze the two principal manifestations of China’s rising governance deficits—the state’s eroding capacity and the ruling party’s declining capacity for political mobilization. Then I examine the political effects of rising governance deficits on state-society relations.

Governance Deficits and State Incapacitation

Among developing countries, China is thought to have a strong state. Compared with countries at comparable income levels, the Chinese government has demonstrated relatively good performance in providing basic services such as health, education, public safety, and environmental protection. Indeed, the reputed effectiveness of the Chinese state has made investment in China attractive for foreign investors. But comparing China with countries with very low state capacity docs not address two key issues: has China’s state capacity been declining or growing since it began the economic transition in the late 1970s, and how does it really compare with China’s peers in the developing world? If evidence points to a trend of state incapacitation, it should raise concerns about the sustainability of the transition. Indeed, a closer look at many specific indexes of government performance would show that the capacity of the Chinese state has been deteriorating during the last two decades. In several important areas, China’s performance actually compares unfavorably with that of some of its peers in the developing world, those countries with large populations such as India and Mexico, or its East Asian neighbors.

The incapacitation of the state is shown in the erosion of the government’s ability to provide essential public services, such as public safety, education, health, environmental protection, and enforcement of laws and rules. In China, there are numerous telltale signs that these indexes of state capacity have been slipping. Such slippage should be especially alarming because it has occurred in a period during which China experienced unprecedented economic prosperity. The key indexes of government performance ought to have improved, rather than declined.

Public and Workplace Safety

Most of the evidence for deteriorating performance is mundane but telling. Take, for example, the number of road fatalities, a key measure of a state’s capacity to regulate a routine, but vital, social activity—transportation. A study of the change in traffic fataliy rates (measured