Incentive Effects

In the preceding discussion I suggested that the research centers provided policymakers with information illuminating trade-offs and complementarities between policy areas, and to some extent shifted the balance of informal authority toward the leadership by diminishing the ministries' relative monopoly of expertise in their functional area. In this section I ask whether the research centers also changed the incentives of researchers and ministries so as to promote coordination through altered research strategies or mutual adjustment between ministries—for example, bargaining or consensus building. The discussion is essentially analytical, suggesting some propositions that might be tested through interviewing researchers and ministerial personnel; thus far, I do not have the data to do more.

First, the research centers provided different incentives for research personnel than did the rest of the bureaucratic structure. As I have already noted, researchers organized into functionally specialized research institutes subordinate to ministries have little if any incentive to consider the impact of ministry actions on other units. The tendency of such researchers to produce research results oriented toward fulfilling the goals of their superior ministries has been noted often in the Chinese press. Researchers working for the research centers, on the other hand,

had no such incentives; indeed, their incentives were to consider the impact of policies in the broadest possible perspective and thus to take account of externalities between agencies. By building staffs that included individuals with a variety of expertise and from multiple agencies, the research centers attempted to provide both the capability and the incentives for researchers to consider the interrelationship between policy areas. Of course, the primary incentives of those researchers were to respond to the priorities of the centers' directors and, ultimately, of the premier. Policy coordination was one such priority, but hardly the only one; accordingly, researchers in these centers could not be expected always to adopt such a perspective.

What effect did the establishment of the research centers have on the incentives of the ministries? One effect, discussed earlier, was to motivate them to increase their expert resources in an effort to maintain their relative authority vis-à-vis the center. However, this ministerial strategy need not necessarily promote policy coordination, and might even interfere with it. Don K. Price has suggested that a major source of fragmentation in the American bureaucracy is precisely the cultural tendency for special interests to appeal to "science" (or expertise) in support of their special goals.^[43] The key question is whether the research centers created incentives for the ministries to seek out and provide information regarding policy externalities and to propose policies that took account of such externalities.

The research centers might have done so in three ways. First, without altering the incentive structure, the centers provided information necessary for the ministries to respond to already-existing incentives for coordinating behavior. That is, ministries always had an incentive to make clear the externalities for them of policies proposed by other agencies; prior to the establishment of the research centers, however, it appears that they often could not do so because policies were frequently considered in a unidimensional manner, with many potentially affected agencies being ignored during the decision-making process and not even aware that the policy was being considered until after its adoption. A major function of the research centers was to collect views on policy proposals from all relevant agencies. Thus, when a ministry proposed a major policy, other units were much more likely to be made aware of it and thus be able to provide information on the externalities of that decision for their particular policy jurisdiction.

Second, the research centers might actually have altered the incentives of the ministries to seek out information on policy externalities and to

adjust their policies to take other agencies into account. Because the centers supposedly provided an "unbiased" view, taking account of interdepartmental effects, any ministry wishing to argue against a research center's view would have to make a better case. This should have encouraged the ministries not only to enhance their analytical capacity (as we have already seen), but also to seek out information on other functional areas so that they could make a case that the policy was good, not only for them, but also for other agencies. This hypothesis about the incentive effects of the centers remains to be tested, however, through interviews exploring whether the ministries' behavior actually changed in this manner.

Finally, the research centers probably promoted bargaining among ministries. The meetings they organized provided an important forum in which such bargaining could occur. Although ministries could provide their own views independently to the State Council, they had every reason to believe that a document reflecting agreement among multiple agencies would carry more weight than one expressing the opinion of a single agency. It therefore would be in the interest of each agency to reach some kind of compromise with other agencies, unless it had reason to believe that it could do better on its own. The latter might be true either because the goals of the agency diverged so greatly from those of others that compromise seemed impossible or, alternatively, because it reflected a belief that the ministry's resources were large enough to allow it to prevail against the opinions of the research center and other ministries. The Ministry of Foreign Affairs, for example, appeared to feel secure enough in its influence to go directly to the premier rather than reaching accommodation with the CIS or other units; according to one of its officials, its suggestions were sometimes overruled but were accepted on other occasions. A researcher from the CIS argued, however, that the ministry usually managed to get its preferred policies adopted.

The centers promoted bargaining—in the form of logrolling or quidpro-quos—between agencies in other ways than simply providing the forums in which such discussions might take place. The centers altered the nature of interdepartmental discussions in both horizontal (cross-departmental and even cross-system) and vertical (long-term planning) ways that, as Robert Keohane has argued for the effect of international regimes on cooperation between nations, made the striking of deals between ministries more likely. First, the centers organized discussions that "cluster issues." As Keohane argued about international regimes: "Clustering of issues under a regime facilitates side-payments among these issues: more potential quids are available for the quo . Without international regimes linking clusters of issues to one another, side-payments and linkages would be difficult to arrange in world politics; in the absence of a price system for the exchange of favors, institutional barriers

would hinder the construction of mutually beneficial bargains."^[44] The interdepartmental discussions organized by the centers may have served a similar function. Second, the ongoing discussions and particularly the long-term planning efforts altered the policy process in ways that effectively placed the participants in a repeated-game situation: they could expect to interact repeatedly with other agencies that formerly they might only occasionally have encountered. Incentives were thereby created to cooperate now in exchange for future cooperation. Moreover, some of that future cooperation could be institutionalized in the present when policy documents were formulated that planned ahead many years. Like policy clustering, long-term planning created more potential "quids."

If the meetings organized by the centers promoted bargaining between ministries, they clearly did not produce total consensus on policy. One would expect that agreement would be reached primarily in those cases where ministries could discover complementarities between their desired policies, or where they could obtain desired concessions from other agencies without making more costly concessions of their own. This did not necessarily always happen. Center officials speak of normally providing final documents to the State Council that laid out remaining areas of disagreement. That these meetings did not produce total consensus is not undesirable from the point of view of the leadership: where basic value conflicts were revealed, the leadership obviously would prefer to make the needed trade-offs itself.