Who Bargains, In What Arenas, And What Strategies Are Employed?

Who Bargains?

Generally, only proximate leaders bargain—that is, equals in the hierarchy, and entities (persons, organizations, factions, localities) one step above and one step below that level. These are the actors that can legitimately make demands. For instance, provinces bargain with one another and

[41] Li Rui, Lun San Xia Gongcheng (Hunan: Hunan Kexue jishu chubanshe, 1985), 135–36. This quote is cited in Lieberthal and Oksenberg, 304.

[42] Zhongguo Tongxun She (China Bulletin), Hong Kong, 23 January 1989, in FBIS , no. 16 (1989), 33.

with ministries as equals, with prefectures and counties immediately below, and with the primary central commissions (e.g., the SPC, the State Economic Commission, etc.) immediately above.

One's capacity to affect policy content (as distinct from implementation) diminishes greatly as one moves downward from the point of decision . In policy formulation, bargaining goes on between the principal bureaucracies and territorial administrations, except at the lower reaches of the hierarchy, where low-level territorial and bureaucratic actors must take account of the very real, albeit more diffuse, social forces that they seek to manage. Nonetheless, there is a representative quality to the process, inasmuch as each bureaucratic or territorial actor sees part of its job as being to reflect at least the minimal interests of subordinates, not so much out of democratic considerations as out of the realization that effective implementation requires the cooperation of subordinates and the realization that one's own interests are inextricably linked to one's organization or locality.

Depending on the policy issue, the implementation process not only involves intense bargaining among the territorial and functional bureaucracies, it also frequently involves officials dealing with a broad range of individuals and small social groups that have no formal standing or political role, yet who must be reckoned with if policy is to be effectively implemented, at least without coercion. As the modernization of China proceeds, the fragmentation of Chinese society proceeds apace, and as it does, the array of social forces affecting implementation will multiply. As this occurs traditional Chinese fears of chaos and immobilization are not unwarranted.

How to meet urgent problems, of a vast scale in a timely manner, in a bargaining system that seeks consensus amidst increasing pluralization is a genuine problem for the system. Obviously, there are alternative tools at hand, such as command and hierarchy or greater use of the market. Each of these also has liabilities; more command and hierarchy reduces flexibility and innovation; increased use of the market increases inequalities and accelerates pluralization.

In What Arenas Does Bargaining Occur?

There are several arenas (or types of arenas) that play central and recurrent roles: the SPC, other commissions, the Standing Committee of the State Council,^[43] the Politburo, state councillors, ad hoc interprovincial and interministerial committees, the National People's Congress, the national finance and planning conferences, materials-allocation confer-

[43] Michel Oksenberg, "Economic Policy-Making In China," 174–80, provides an excellent description of the roles of commissions, vice-premiers, the SPC, and the Standing Committee of the State Council.

ences, central work conferences, and specific policy-issue committees. These forums are replicated at all system levels . At this, we see only the tip of the iceberg of conflict-resolving arenas. Below I concentrate simply on national arenas.

The SPC (in 1989 consisting of the pre–April 1988 State Planning Commission and the old State Economic Commission) is one of the most important bargaining arenas. As a commission, the SPC stands as a buffer between individual ministries and the State Council. In an interview I was told that the way in which allocations among ministries are determined is "complicated" and that there is "lots of discussion." The interviewee went on to say that every province and municipality wants allocations that they consider small but that become a huge sum when aggregated. The SPC is the organ charged with mediating these conflicting claims and avoiding deficits and material bottlenecks.^[44] Because the SPC is divided into functional bureaus, conflict patterns within the organization tend to reflect those in the wider bureaucratic environment.^[45]

Another, and indeed higher, arena for bargaining among territorial and functional interests is the State Council, meaning either its Standing Committee (with a large permanent bureaucracy of its own, which needs a great deal more study) or the entire State Council. Conflicts that cannot be resolved by individual commissions or ministries are referred upward to this next higher level. For instance, to paraphrase one interviewee, "Say there is a high value investment to be made ... and say four provinces or municipalities all want it ... obviously this is a difficult task. ... The SPC can reach agreement with mayors, but if that is not possible, it then goes to the Standing Committee of the State Council."^[46]

It appears from my interviews, as well as from the work of Oksenberg, that one of the key systemic problems is that an excessive number of issues cannot be resolved by the ministries and localities themselves, even though, as Susan Shirk says in chapter 3, there is a desire to resolve issues at the lowest possible level. This can overwhelm the top echelons of the State Council (and Politburo) in a Niagara Falls of issues, a torrent whose volume is greatly increased by the fact that market mechanisms are not in place that elsewhere greatly reduce the number of items requiring conscious bureaucratic (political) decision in the first place.

In an effort to reduce the number of issues kicked to the next higher level, the Chinese have repeatedly tried to merge organizations that habitually conflict (and yet need to coordinate policy). The Water Conservancy and Electric Power ministries are just one of several such cases. In 1982, for instance, the Water Conservancy and Electric Power

[44] I.F., no. 24 (1982), China, 7 and 4.

[45] I.F., no. 27 (1983), U.S., 1.

[46] I.F., no. 24 (1982), China, 5.

ministries were merged. As one interviewee expressed the logic of the move, discussions would now be "in the family" rather than "between families."^[47] This union ended in divorce in April 1988, once again, with the re-creation of the Ministry of Water Resources and the merger of the Electric Power Ministry and other units into a new Ministry of Energy Resources.^[48] What is fascinating is that even when the water-conservancy people had been joined in a "shotgun union" with the electric-power people, individuals from each of the old ministries still referred to their new organization as the Ministry of Water Conservancy and Ministry of Electric Power, respectively.

Not only are conflicts resolved in the SPC and the State Council, there also is a rich repertoire of regularized and ad hoc procedures, conferences, and committees to resolve disputes in both the formulation and the implementation phases of the policy process at all system levels. Among the most important are the National Finance Conference and the National Planning Conference. One informant described the National Planning Conference as a Chinese market in which delegations from various provinces and ministries worked out deals. Lieberthal and Oksenberg explain that in the planning process the Ministry of Finance (MOF)

must go over the draft plan from the SPC with a view to its financial feasibility and implications. Not surprisingly, the perspectives of the three major participants in this process (the line ministries and provinces; the SPC; and the Ministry of Finance) often differ as to both the revenue and expenditure implications of their proposals. ... The key forums for resolving the differences among these various groups in the annual planning cycle were generally the National Planning Conference and the National Finance Conference. ... Since not all problems could be solved at these meetings, a central work conference that brought together provincial Party first secretaries as well as Politburo members and other key officials usually met to reach final decision on particularly contentious issues. The Politburo itself met separately to determine its position, where necessary.^[49]

When the Politburo finds itself deadlocked, the supreme leader, in this case Deng Xiaoping, and before him Mao Zedong, becomes the court of last resort. From a system-development perspective, the critical questions for the future are these: Will the system be able to reduce the number of issues bumped up to this level for resolution? And will individual leaders assume less importance as institutions achieve greater legitimacy?

Finally, one of the most interesting developments of the first decade of reform in the post-Mao era was the rise of the National, and local,

[47] I.F., no. 25 (1982), China, 1.

[48] Beijing Review 31, no. 7 (1988): 10–11.

[49] Lieberthal and Oksenberg, Bureaucratic Politics , 61.

People's Congress (NPC) as an arena for bargaining. For instance, during the March 1989 session of the NPC, Xinhua carried the following report, quoting one NPC deputy named Yang Lieyu: "However, he noted, as most provincial governors and mayors of major cities are NPC deputies, who usually spoke a lot, asking for everything ranging from favorable policies to energy and raw materials, from cabinet members and ministers, deputies' group discussions sometimes became bargaining sessions between the central government and local authorities."^[50]

Strategies for Bargaining and the Necessary Resources

Strategies are contingent upon the actor under consideration, the policy issue in question, whether one is trying to promote, or frustrate, a specific initiative, the bundle of interrelated issues on the agenda at the same time, one's resources and position in the hierarchy, and the wider social-political-economic contexts. A few examples may serve to illustrate the rich and sophisticated diversity of strategies employed.

Foot-In-The-Door And "Fishing Projects."

In this gambit, the bargainer tries to secure a commitment that will permit work on a project to start. The idea is to obtain an initial commitment that is nonthreatening to potential or actual adversaries but that will not preclude the possibility of enlarging the project at some later date, thereby creating a situation in which each stage's sunk costs (combined with the presumed benefits of the next phase) become justification for taking the next step toward the initiator's ultimate objective.

At the Fourth Session of the Sixth National Chinese People's Political Consultative Conference, a speech by Qian Jiaju concisely explains the strategy: "In the past 30-odd years ... we had a fondness for big projects but ignored actual effects, and thus paid an enormous price ... from those "fishing projects" (which were said to need limited investment at the beginning according to the planners but later involved more and more additional funds after they were started). We should not follow this stupid practice any more."^[51]

For this strategy to work, several conditions must be met and several resources must be in the bargainer's possession. First, and most important, the decision under consideration must be separable into stages, and each stage must generate sufficient benefits to be defensible in its own terms. For instance, dams can be raised, and each level of dam can, at least possibly, provide benefits that justify each step in its own terms. Obviously, some decisions are all or nothing, and any benefits are contin-

[50] Xinhua , in English, 28 March 1989, in FBIS , no. 59 (1989), 20.

[51] FBIS , no. 99 (1986), W4.

gent on completion of the whole process. Such issues make this strategy difficult to employ.

The bargainer seeking to use this strategy must have the capacity to disguise "his" ultimate objective, or at least convince potential opponents that the first step will not offend their interests and that subsequent steps are not preordained. Some decisions cannot credibly meet this condition, and some bargainers simply are too identified with the ultimate objective to disassociate themselves from it. For instance, because the YRVPO has worked for a high Three Gorges Dam for decades, any attempt by it to promote a more modest project would be seen as the entering wedge for its more expansive ambitions.

Whipping Up Support and Faits Accomplis

In this strategy, local or ministerial leaders use the media to fan support for a project, begin work on it, and then point to their responsiveness to "public opinion" as the rationale for, in effect, having presented superiors with a fait accompli. "And, if one whips up opinion through newspapers and broadcasting stations and starts the so-called preliminary work before the feasibility study of a project is completed, so as to make the project an accomplished fact and force the central authorities to agree with the plan, one's practice, I think, is definitely a violation of the basic procedure."^[52]

For this strategy to be feasible, the bargainer must have resources that he or she can independently deploy without central approval. As Naughton points out in his study of the loss of central control over investment resources, the "localization" of control over capital was one of the most profound changes of the first decade of post-Mao reform.^[53] The combination of decentralized resources and decentralized decision authority have created a situation in which the Center has been presented with faits accomplis on an enormous scale in the capital construction area.

Another precondition for this strategy to be effective is that the sanctions for presenting higher authorities with faits accomplis cannot be too severe. The fact that so many local leaders have felt free to proceed in defiance of central preferences is one indication of the Center's diminished reach in the wake of 1980s reform.

Painting a Rosy or a Black Picture—Cooking the Books

In the same way that supporters of an initiative try to minimize perceived costs and uncertainties, opponents frequently exaggerate them. For instance, in one interview I asked about the price tag for the Three Gorges Project,

[52] Ibid.

[53] Naughton, "Decline of Central Control," 51–79.

noting that I had seen cost estimates that varied by a factor of five. My respondent, who was an ardent supporter of the project, bluntly replied that those who advance extremely high estimates "oppose the Three Gorges Project."^[54]

For this strategy to be effective, the bargainer must possess seemingly credible information. It is no accident that each ministry and locality has its own statistical units that tend to produce data supportive of local or organizational goals. I noted above, for instance, that central and local estimates concerning the number of refugees that would be generated by the Danjiangkou Dam diverged in a predictable fashion, with each side of the dispute promoting data most consistent with its interests. Similarly, respondents at one ministry at which I interviewed assumed that the figures I quoted from another ministry had been distorted in a way consistent with that other ministry's interests. One implication of this process is, of course, that more information will not necessarily speed up the decision process, unless the data are collected using agreed-upon methodologies in the first place.

A Little Something for Everyone

This is a coalition-building process in which the scale of an undertaking is enlarged to provide benefits to all of the strategic groups that could obstruct agreement. In cases such as the Three Gorges Project, there may exist a situation in which any enlargement of the scale of the project not only attracts some wavering elements, it also scares away others by virtue of the project's very size. The costs of building a big enough coalition may simply be prohibitive, both economically and politically.

Getting to Key Decision-Makers, "Old Friends," and Relatives

The utilization of political networks cannot be overlooked.^[55] In the bargaining process, one's success may hinge on the "connections" (guanxi ) one possesses and the IOUs that can be collected. Personal networks, though not limited to organizations, are built into them. A leader, such as Yu Qiuli, who has extensive personal networks throughout the planning, energy, and military bureaucracies has great power and influence, not only because he directly controls powerful organizations, but also because he has been able to place loyal friends into a broad range of other organizations.^[56]

When asked how political actors promote their interests, one inter-

[54] I.F., no. 7 (1982), China, 11.

[55] John W. Lewis, "Political Networks and the Chinese Policy Process," an occasional paper of the Northeast Asia—United States Forum on International Policy (Stanford University, 1986).

[56] David M. Lampton, Paths to Power: Elite Mobility in Contemporary China (Ann Arbor: Center for Chinese Studies, 1986), chap. 5.

viewee placed particular emphasis on face-to-face meetings with decision-makers and contacts with old friends. Close personal ties with decision-makers, he asserted, could be decisive.^[57] Also not to be overlooked, in the "new China" as in the "old", marriage patterns establish lines of influence and obligation that can be decisive in certain bargaining settings (we need to know a great deal more about this).