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Eight The Behavior of Middlemen in the Cadre Retirement Policy Process
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Eight
The Behavior of Middlemen in the Cadre Retirement Policy Process

Melanie Manion

In the decade since 1978 top leaders in Beijing have introduced policies that seem to mandate important changes in virtually every issue area. Policy outcomes vary widely. Many policies have failed to produce the prescribed levels of change, and some have failed even to produce change in the prescribed directions. What accounts for such differences in the transformation of policies into actions? Taking their cues from work on implementation in developed and other developing countries, studies of post-Mao reform have described the twists and turns of policy that occur after its formulation and have suggested a number of explanations.[1] This chapter builds on those case studies that investigate the behaviors of different individuals and organizations and extrapolate to the Chinese policy process generally and, often less explicitly, to relations of authority in the Chinese bureaucracy.

One line of argument focuses on behaviors of the policy-making elite. Rosen's study of the policy to restore key secondary schools after 1976 points to a leadership divided on basic developmental strategies as the

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main explanation for how the policy was implemented. The original policy had built-in contradictions, reflecting conflict between the goals of popularization and the raising of standards in education. Policy implementation was similarly conflictual, until the political conflict at the top was resolved in favor of the reformers.[2] Solinger's work on the attempt to use price controls in 1980–81 also emphasizes elite divisions. Policymakers disagreed about the extent of inflation and about how to deal with it. Even after the decision was reached to enforce a price freeze, leadership differences persisted. These differences were reflected in policy directives and accompanying documents. Lower levels reacted differently to the signs of elite discord, and the result was great variation in local implementation.[3] Lampton also finds disagreement at the top in his study of long-range water policies. He focuses less on the conflicts than on the process for resolving them—consensus building. Lampton documents the extensive consultation and negotiation that policymakers promoted and tolerated in a quest for consensus. This consensus orientation and the large number of players that were involved in the wrangling over solutions ultimately resulted in ineffective implementation.[4]

Another set of explanations focuses on behaviors of the ultimate targets of policy. Naughton examines the post-1978 effort to reduce the share of decentralized investment and finds that the localities thwarted this effort by consistently deflecting central-government decisions toward their own interests. They implemented policies selectively, taking an active stance only toward policies that gave them a greater degree of control over resources. The result of this pragmatic approach to policy implementation was persistent overfulfillment of the decentralized investment plan.[5] Walder describes successful efforts by workers to resist wage and incentive policies in state enterprises in 1978–82. Workers withdrew efficiency in the face of attempts to increase productivity through higher work norms and performance-based bonuses and wage raises. Managers responded to the efforts by workers to defend their interests. For example, they distributed as bonuses the maximum amount permitted by policy and relaxed the link between performance


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and reward. This diverted policy from its original goals and affected the outcome of the industrial reform program.[6]

The analysis presented in this chapter investigates variation across time in the transformation of one policy into actions and finds evidence of the influences reviewed above: underlying leadership conflict, unwillingness or inability to impose solutions on subordinates, a selective approach to policies, and pressure at the grass roots. Analytically, it links up explanations that give priority to policymakers at the top and those that pay more attention to policy targets at the bottom. I situate the analytical perspective between top and bottom in the policy process by asking about the behavior of middlemen—the individuals and organizations charged with implementing policy. Investigating the policy process from this perspective proves useful, not only because middlemen are major players in the process but also because it requires an explicit consideration of the relative effects on policy outcomes of those at the top and bottom.

My specific empirical focus is implementation of cadre retirement policy—the policy to institute regular retirement of political and administrative functionaries, professionals, and specially skilled personnel.[7] The time period is 1978, when the policy was introduced, through 1986, a period in which policy outcomes varied significantly and intelligibly. Briefly, in 1978–81 cadre retirement was a policy that did not yield results, essentially because it was not implemented; beginning in 1982, cadre retirement policy began actually to be implemented, but not without serious deviations. I organize my analysis around three simple questions about middlemen in the cadre retirement policy process. Why did they effectively ignore policy for more than three years? What caused them ultimately to begin to implement policy? And what explains their choice to deviate from official policy in the course of implementing it?

I find that three factors help explain why cadre retirement was a policy without action implications in 1978–81. First, middlemen confronted conflicting signals from policymakers, reflecting a lack of consensus at the top. Second, middlemen were charged with executing a policy of cadre restoration that in practice contradicted retirement policy and gave them a legitimate alternative to retiring cadres. And third, retire-


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ment policy did not contain objective decision criteria such as mandated retirement ages to constrain middlemen to take action. A formal revision of policy in 1982 changed this situation. As a result, middlemen began then to implement policy. Policymakers revised cadre retirement policy in ways that both encouraged and constrained middlemen to implement it and made it easier to implement. The Party organization joined the government in support of the policy, sending a single clear signal to middlemen in place of previous conflicting signals. The policy of restoring veteran cadres to power was dropped and was replaced with campaigns to streamline bureaucracies and rejuvenate leading groups. Both campaigns had objectives that were consistent with those of cadre retirement policy. Policymakers constrained middlemen to implement policy by making age the basic criterion for retirement decisions and by specifying ages of retirement for all cadres. And policymakers changed the incentive structure, to make retirement more attractive to cadres. This made retirement policy easier to implement.

Middlemen implemented policy, but not without serious deviations. The nature of those deviations provides insight into their underlying cause: deviations consisted of increasing incentives for cadres to retire. Middlemen thus proved to be unwilling or unable to implement policy successfully without providing a retirement deal better than that stipulated in official policy. In implementing policy, they proved keenly responsive to policy targets at the grass roots, as well as to policymakers at the top.

These answers suggest some tentative conclusions about the actual consequences of the formal structure of bureaucratic authority and about the constraints and incentives not represented in that organizational design. I discuss those conclusions and consider their generalizability in the final section of the chapter.

Sources

The information in this chapter derives mainly from the following sources: collections of official documents, a self-administered questionnaire distributed to retired cadres, interviews with retired cadres, interviews with younger cadres, and interviews with government leaders.[8]

Of official documents consulted, the most useful were those reproduced in two collections of Party and government documents on veteran cadre work, published by the Central Organization Department and the


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Ministry of Labor and Personnel in 1983 and 1986.[9] These constitute my main source of information about formal policy. I also obtained some such information in interviews with government officials in charge of cadre retirement policy in 1986 and 1988.

Interviews with retired cadres and younger cadres supplied useful information on how retirement policy was implemented at the workplace. I conducted thirty-six loosely structured interviews with retired cadres in Beijing in 1986–87. I also conducted structured interviews with a class of seventy-one younger cadres at Beijing University in 1988. They had been sent by their workplaces, representing nearly every province in the country, to obtain college equivalence in a special two-year course of cadre training.

In addition, I arranged for the distribution in 1987 of questionnaires containing closed-category items only, to a larger sample, consisting of all retired cadres in a small city in the northeast. A total of 250 questionnaires were completed and returned, an acceptable response rate of 38 percent. These questionnaires were an additional source of information on how policy was implemented.

Players And Organizational Context

Cadre retirement policy aimed to retire nearly 2.5 million surviving veteran cadres, revolutionaries who had joined the Communists during the wars of 1924–49.[10] It also aimed to replace an existing de facto lifelong tenure system for cadres with a regular retirement system. Consequently, veteran cadres were the immediate but not the only targets of retirement policy. Postrevolutionaries, those who had become cadres after the Communist victory in 1949, were also affected. Among them were 2,353,000 cadres who had been recruited in 1950–52,[11] many of whom were in their fifties when cadre retirement policy was introduced. These two groups, veteran revolutionaries and cadre recruits of the early 1950s, constituted the most important targets of cadre retirement policy.


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Middlemen in the cadre retirement policy process are defined here as people and organizations charged with executing the policy formulated at the top. These range from local governments that promulgated local regulations on cadre retirement to functionaries at the lowest level of the workplace who were charged with processing retirements. Their actions make more sense in the context of two features of the formal structure of authority: the differences between territorially based organizations and functional departments, and the exceptional Party domination of the issue area in which cadre retirement falls.

In the case studied here, as in many other issue areas, authority is formally structured in two separate hierarchies of territorially based organizations and two functional hierarchies. Both kinds of hierarchies have organizations at the top in Beijing and down to the county level. There are two of each kind of hierarchy because at each level are parallel Party and government organizations.

The key differences between the territorially based organizations and the functional departments are the span of authority and the nature of authority relations. The authority of territorially based organizations, the Party committees and governments at the various levels, extends to more than simply the cadre issue in territory at and below their respective levels.[12] This span of authority over many issues is reflected in the relation between a territorially based organization and the functional department responsible for cadres, in the Party or government hierarchy at any given level: the functional department is subordinate to the territorially based organization in a "relation of leadership" (lingdao guanxi ), the most authoritative type of linkage between Chinese organizations. The relation between territorially based organizations at different levels of the hierarchy is also one of leadership. By contrast, the authority of functional departments spans separate, broadly defined issue areas which in principle do not overlap. The relation between superior and subordinate organizations in the functional hierarchy dealing with cadres is one of "professional guidance" (yewu zhidao ), a relation more circumscribed than that of leadership.

Cadre retirement is one issue within the area defined as part of the organization-personnel "system" (xitong ). This system is virtually solely responsible for all cadre work—which includes recruitment, staffing, training and education, various forms of assessment, and maintenance


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of personnel dossiers.[13] The main Party organizations in the system are the organization departments at the various levels; their government counterparts are the personnel departments.[14]

Barnett in 1967 identified the system as the most important of the key "watchdog" mechanisms for ensuring Party leadership.[15] More recent studies concur with this view. The post-Mao trend in many issue areas has been toward a retreat of Party organizations from routine work, along with a decentralization of authority and the granting of more autonomy to government organizations in the conduct of administrative work. In the organization-personnel system, authority has been substantially decentralized. However, Party organizations continue to dominate even the day-to-day work.[16]

Within the organization-personnel system, the issue of cadre retirement is particularly important and, perhaps as a consequence, particularly dominated by the Party. This is revealed most clearly in the elaboration of structures to manage cadre retirement.[17] These are indicated in figure 8.1.


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The importance of cadre retirement is evident in the status of veteran cadre departments at the provincial, prefectural, and county levels: the departments are not subordinate to the organization departments at the respective levels, but rather are equal to them in bureaucratic status. The organization departments relate to parallel veteran cadre departments by giving professional guidance. The Party committees exercise direct leadership over veteran cadre departments. Only at the top level is the Veteran Cadre Bureau a subordinate department of the Central Organization Department.

Party dominance is indicated by the virtual absence, until about ten years after the first regulation on cadre retirement was issued, of specialized structures for cadre retirement in the government hierarchy, except at the top level. As late as 1986, government organizations usually attended to cadre retirement work by assigning responsibility to one leading cadre in each of the personnel departments at the provincial, prefectural, and county levels. These cadres worked in coordination with the Party veteran cadre departments parallel to their personnel departments.[18]

Institutional arrangements for cadre retirement at the workplace have tended to depend on workplace size and the number of retired cadres. National and provincial departments have either bureau-level veteran cadre departments or division-level departments under the organizations (usually the organization department) responsible for cadre work. Smaller and lower-level workplaces do not usually have specialized structures for cadre retirement. Rather, this work is carried out by the Party and government cadres or organizations responsible for cadre work.[19]

What did this context mean for middlemen in the cadre retirement policy process? Those at the workplace were responsible for implementing a large number of policies in the organization-personnel system, and cadre retirement represented only one task among many. Those tasks were not always mutually complementary; in cases of policy conflict, middlemen had to choose which policies to implement and which to ignore effectively. Many factors determined how middlemen responded to this choice. Party domination of cadre management dictated greater


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Fig. 8.1.
Formal Structure of Authority in Veteran Cadre Work

attention to signals from Party organizations than to those from their government counterparts. The interests of policy targets also came into play. In making choices about transforming policies into actions, it made sense for middlemen to consider the relative difficulty of their tasks. Obviously, policies that challenged vested interests would not meet with ready compliance. Thus middlemen could be expected to prefer to implement more-appealing policies over less-appealing ones. Cadre retirement disturbed what was seen as the norm in bureaucratic careers, and it deprived cadres of positions and income. For these reasons and others,


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many cadres were inclined to resist retirement. Further, immediate policy targets were generally those with the most seniority at the workplace. Virtually by definition they included those with the most clout, whether that was reflected in official position or not. These interests of policy targets made cadre retirement policy difficult to implement easily. Resistance of policy targets made it an unappealing policy for middlemen too.

Policy Without Action Implications

From June 1978 through 1981, top Party and government organizations issued more than twenty documents regulating various aspects of cadre retirement. These organizations include the Central Committee and the State Council, as well as the Central Organization Department and the Ministry of Labor and Personnel. However, middlemen took little action to retire cadres in this period. Indeed, in the view of those for whom the policy can be expected to be most salient, those charged with executing policy and the cadres who were the policy's immediate targets, the post-Mao cadre retirement policy dates from 1982, not 1978. Why did what seems, from the flow of official documents, to be a policy not have action implications?

Before exploring this question, it is important to establish that the documents do, in fact, seem to articulate a policy to retire cadres. Taken as a whole, they combined proclamations of general principles with concrete measures that elaborated a comprehensive cadre retirement system.[20]

The documents established eligibility standards and pensions for three retirement statuses: regular retirement (tuixiu ), "special" retirement (lizhi xiuyang , usually abbreviated to lixiu ), and semiretirement to advisory (guwen ) and honorary (rongyu ) positions. Rank and revolutionary seniority determined eligibility for the different statuses and pension levels. Revolutionary seniority was measured as participation in the Communist revolution before four strategic turning points in the military struggle for power: 7 July 1937, the end of 1942, 3 September 1945, and 1 October 1949. Higher status and bigger pensions were allotted to higher-ranking cadres and those who had joined the Communists earlier rather than later. Eligibility standards and pension levels for special and regular retirement statuses are summarized in table 8.1. The vast majority of veteran cadres surviving in 1978–81 had joined after the defeat of the Japanese in 1945. These veterans of the civil war between the Com-


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TABLE 8.1. Retirement Standards, Statuses, and Pensions, 1978–81

Revolutionaries

Period of Recruitment

Rank

Retirement Status

Pension (%)

1921–37

low, middle, high

special

100

1937–42

middle, high

special

100

 

low

regular

90

1943–45

high

special

100

 

low, middlea

regular

90

1945–49

high

special

100

 

low, middle

regular

80

Postrevolutionaries

Years of Service

 

Retirement Status

Pension

&!;20

 

regular

75

15–19

 

regular

70

10–14

 

regular

60

NOTE: Rank standards are categorized as high for a rank at or above prefectural level, middle for a rank at or above county level but below prefectural level, and low for a rank below county level.

a In 1980 a middle-ranking cadre who joined the revolution before 1945 became eligible for special retirement status and the full pension.

munists and the Guomindang numbered 2,190,000 in 1980.[21] Most were eligible only for regular retirement status.

Veteran cadres in positions of leadership at and above the county level whose health prevented them from performing normal duties of office but who were still able to do some work could semiretire to advisory or honorary positions.[22] This was termed retirement to the "second line" (di er xian ).[23] Evidently, the second line was introduced to permit cadres to transfer leadership duties gradually and continue to play a role while


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taking into account their age and health. But of all aspects of the cadre retirement system elaborated in 1978–81, this status was least explicitly articulated. For years after their introduction in 1978, the actual role of cadres on the second line remained unclear, even to those who had designed the system.[24] Documents never defined the role of cadres in honorary positions. They defined the role of advisers, but in very general terms. Advisers were to engage in investigation and study, maintain familiarity with the overall situation, help leaders originate and develop ideas, provide counsel, and transmit to younger generations the Party's traditions and style of work as well as their personal experience and knowledge.

Documents established special retirement status for some veteran cadres in poor health and unable to continue work. Before 1978 the term lizhi xiuyang , literally "leave of absence for convalescence," had referred to a practice of permitting veteran cadres to retire from office temporarily, on full salary, to convalesce. The practice dated from 1958.[25] When the term lixiu was revived two decades later as a special form of permanent retirement, it retained its earlier connotation of privileged status and its provision of full salary.[26]

Cadres who did not meet the standards for special retirement could retire with regular retirement status, on less than full salary. Special retirement and regular retirement became retirement to the "third line" (di san xian ). Standards for regular retirement included age guidelines, generally fifty-five for women and sixty for men, but no rank guidelines. Standards and pensions for cadre regular retirement were the same as those established for worker retirement. Only age guidelines differed, and those only for women.[27] Pensions for regularly retired cadres ranged from 60 to 90 percent of salary, depending on period of recruitment to service. Veteran cadres were eligible for 80 or 90 percent of salary, while postrevolutionaries were eligible for 60 to 75 percent.

The documents issued in 1978–81 not only detailed arrangements for pensions but also outlined provisions on health care, housing and relocation subsidies, participation in political study, access to informa-


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tion, and leisure activities. They discussed broader issues as well, such as how to promote respect and concern for retired cadres in society at large.

The articulation in official documents of a policy to retire cadres was buttressed by a thoroughgoing critique of the cadre lifelong tenure system, conducted in a wide range of periodicals, mostly in 1980. Critics associated lifelong tenure in the span of world history with economic backwardness and political autocracy, claimed no support for lifelong tenure in the Marxist classics, and found lifelong tenure directly or indirectly responsible for a number of serious defects in the exercise of power in communist systems generally and the Chinese system in particular.[28]

Why did what seems to be a policy to retire cadres not have action implications for middlemen? First, policymakers at the top had not reached a consensus on cadre retirement policy, and they communicated their ambivalence to middlemen in a number of ways. Party documents and government documents differed in nuance: the Party organization did not express unambiguous support for a policy to retire cadres in 1978–81. And because cadre management is a particularly Party-dominated issue area, it is not surprising that the lack of clear Party support for retirement blunted any action implications of government documents. Second, policymakers gave middlemen another policy to execute, one that conflicted with cadre retirement. Middlemen had a legitimate alternative to retiring cadres. And finally, cadre retirement policy contained no stipulations such as mandated retirement ages that could serve as objective measures of success or as constraints on middlemen to execute policy.

According to Chen Yeping, writing in 1983 as the prospective Central Organization Department head, there was consensus among top leaders on the principle of a cadre retirement system. However, leaders dis-


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agreed on the urgency of replacing old cadres with younger ones. In a series of speeches beginning in 1979, Deng Xiaoping argued that generational succession was a very urgent matter and that younger cadres should be apprenticed while taking on main responsibility, with older veterans providing guidance as required. Deng's opponents on the issue contended that generational succession could be taken more slowly and that veteran cadres could exercise primary responsibility for a number of years.[29]

This ambivalence among policymakers probably accounts for the difference in priorities reflected in Party and government documents and the failure of the Central Committee and the Central Organization Department to demonstrate clear support for a policy to retire cadres. Not until February 1982 did the Central Committee issue a partner document to the many State Council initiatives on cadre retirement.[30] The strongest Central Committee show of support for cadre retirement in 1978–81 was a general resolution, passed in February 1980, to abolish the de facto lifelong tenure system for cadres.[31]

Party documents on cadre retirement contained a message that effectively replaced the policy to retire cadres with a policy to restore to power veteran cadres who had been purged or demoted during the Cultural Revolution. Probably the first document on veteran cadre work issued by a Party organization in 1978–81 was a February 1978 Central Organization Department statement of views on veteran cadre work.[32] Its main content was the importance of restoring veteran cadres to power. It stated that those able to work were to be assigned suitable work as soon as possible. Those with long experience in positions of leadership were to be assigned main positions of leadership. Indeed, the document instructed subordinate organization departments to promote the core role of veteran cadres in modernization. As an example of the scope and nature of restoration, the party journal Hongqi publicized the work of the organization department of Hunan province. In Hunan, of the surviving cadres managed by the provincial Party committee before the Cultural Revolution, 98 percent were assigned positions ranked equivalent to or higher than their former positions. The rule adopted was this: so long as


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they are able to work, they are assigned work; those unable to work are permitted to retire upon request.[33]

In principle, restoration of veteran cadres as a strategic short-term policy was not inconsistent with retirement. The younger generations of cadres the regime sought overall to promote included most who had been recruited and had risen under the influence of radical leftist standards thoroughly discredited by the end of 1978. Policymakers sought the cooperation of veterans in selecting and training suitable successors. This was not simply a task of recruiting qualified managers of modernization, but one of weeding out those whose politics were suspect in the changed political climate.[34] In practice, however, veterans restored to power did not actively create the conditions for their own retirement by preparing successors.[35]

Finally, even the government documents that established a cadre retirement system did not clearly impel middlemen to execute policy. The main reason is their failure to set objective criteria for decisions on retirement. In turn, there were no such criteria to evaluate the performance of middlemen or to constrain them to retire cadres.

If retirement is defined as an explicit direct relationship between old age and employment, then government documents introduced neither the principle nor the practice of cadre retirement in 1978–81. Retirement-age guidelines were set for regular retirement status, but these determined eligibility for benefits and in no sense mandated retirement at specified ages. More to the point, old age was not intrinsically a reason to retire cadres. Retirement was for those whose state of health precluded performing normal work. Documents acknowledged that old age generally brought with it some decline that could affect the ability to work, but the rationale for cadre retirement was two vague intervening variables: state of health and the ability to work normally. Old age per se was not linked to retirement until 1982.

It is instructive here to compare the language in the first and most comprehensive post-Mao government document on cadre retirement


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with a document on worker retirement issued at the same time.[36] The State Council Temporary Measures on Arrangements for Aged, Weak, Ill, and Disabled Cadres applied to cadres whose "age and state of health preclude continuing normal work." The document on worker retirement applied to "old workers and workers who have lost the ability to work because of illness or disability." Cadres meeting standards specified "could retire." Workers meeting standards specified "should retire." Even the title of the document on workers, the State Council Temporary Measures on Worker Retirement, suggests the contrast. In 1980 the State Council did issue a document stating that cadres who were unable to work "should retire."[37] Yet that document applied to cadres for whom no retirement-age guidelines had been set. And even with the stronger language, inability to work normally rather than old age per se was given as the reason for retirement.

Yet another contrast is provided in a government document protesting the pro forma nature of some worker retirements, with formally retired workers remaining employed at their posts.[38] No comparable protest was contained in documents on cadre retirement in 1978–81. Also, workers who did not retire according to regulations were to have their salaries stopped.[39] No comparable arrangement existed for cadres.

One retired cadre summed up the situation in 1978–81 in the following way: "It was very difficult to distinguish who should retire from who should not retire. If it is too flexible, it is the same as not having it at all." Without age guidelines as the basic decision rule for retirement, decisions could be made only through case-by-case deliberation on the applicability of vague subjective standards to particular cadres. These standards were open to interpretation and did not constrain middlemen to retire cadres.

Execution Of Policy

The formal revision of policy in 1982 transformed a policy without action implications into a policy that middlemen executed by retiring cadres. Four features characterize this change. First, policymakers gave middle-


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men clear and coherent signals of their commitment to cadre retirement. In particular, middlemen in the Party-dominated organization-personnel system no longer faced the ambivalent situation of government initiatives and Party disinclination on cadre retirement. Second, middlemen no longer had conflicting policy goals that gave them a legitimate alternative to executing policy. Rather, policymakers established a number of objectives that were mutually reinforcing: retiring cadres helped middlemen achieve success in the campaigns to streamline bureaucracies and rejuvenate leading groups. Third, retirement policy was revised to constrain middlemen to execute it. Policymakers set the objective criterion of age as the basis for specific decisions to retire cadres. Decisions not to retire cadres who had reached the relevant ages became exceptions to the general rule, requiring justification. Finally, policymakers made compliance with retirement policy more attractive to a large proportion of potential retirees. Consequently, middlemen faced less resistance from the ultimate targets of the policy.

It is plausible that policymakers reached agreement to revise cadre retirement policy only by changing the incentive structure for themselves and other leaders: some key revisions applied to leaders at the top and were probably the result of a negotiated settlement. Thus a changed incentive structure may have been not only a feature but also an explanation of the radical shift in policy in 1982.

The revised policy exempted from retirement leaders at the very summit of power. The elimination of these leaders as targets of cadre retirement policy was announced in a Central Committee document in February 1982 and aired in Hongqi in March 1982:

Our party is a big party, our country is a big country. We need a few dozen veteran comrades with international prestige, who are capable of careful and long-term planning, who maintain a comprehensive view of the situation, and who are still in good health. [We need them to remain] in positions at the core of leadership in the party and government, to help stay the course. Other veteran cadres must gloriously retire from service at the ages specified, in keeping with regulations.[40]

A second indication of a compromise was the creation of a new institution for retired top leaders: advisory commissions at the national and provincial levels.[41] The commissions were given an estimated life span of ten to fifteen years, enough time to ease into retirement a generation of


233

senior veteran cadres.[42] These changes in the retirement-incentive structure at the very top seem to have been the key to reaching agreement on the revised policy that emerged in Party and government documents beginning in 1982.

In February 1982 the Central Committee issued a Decision to Establish a Veteran Cadre Retirement System, indicating its support of earlier government initiatives and sending a clear signal to middlemen to begin to execute policy. The signal was not only symbolic. The document explicitly assigned tasks to the Central Organization Department. Nearly twenty more documents were issued by Party and government organizations in 1982 alone, treating various aspects of cadre retirement: establishing accurately revolutionary seniority, determining changes in retirement status, detailing formal procedures for retiring cadres, introducing honorary certificates of retirement, discussing the role of retired cadres, and instructing veteran cadre departments in their responsibilities. For the first time, Party and government documents were speaking the same language on cadre retirement.

Policymakers linked retirement to campaigns to streamline bureaucracies and rejuvenate leading groups, begun at the national level in 1982 and carried out at the provincial and lower levels in 1983–84.[43] Streamlining bureaucracies involved a reduction in personnel and departments in the Party and the government, with the objective of improving policy coordination. The rejuvenation of leading groups aimed to improve the quality of leadership by promoting more highly educated, professionally competent, and younger cadres. Quotas were set for both campaigns. Unlike the policy of restoring cadres to power, which had conflicted with retirement goals, these two campaigns complemented the policy to retire cadres. Middlemen no longer had a legitimate alternative to retiring cadres. Indeed, retirement was virtually a prerequisite for success in the campaigns.

Policymakers also constrained middlemen to execute policy, by replac-


234

ing the vague and subjective standards of good health and the ability to work normally with age as the criterion for decisions on retirement. Flexibility was built into the policy in two ways. A supplementary rule stated that those whose health prevented them from working normally could retire early, and those who were needed at work and whose health was good could postpone retirement, with the approval of the relevant Party committee. Also, retirement age guidelines differed by rank and sex: in general, higher-ranking cadres retired later than lower-ranking cadres, and men retired later than women.[44]

Even with the opportunity to exercise discretion introduced in the supplementary rule, the 1982 revised policy constrained middlemen to retire cadres. The policy introduced a direct link between age and retirement, making age per se a reason to retire cadres. And it reversed the relative importance of the objective standard, age, and subjective standards. Health and ability to work normally were no longer an integral part of all decisions on retirement. With retirement at fixed ages as the general rule, decisions to retire cadres were essentially standardized. Whereas in 1978–81 middlemen had had to interpret and apply ambiguous guidelines in order to retire cadres, beginning in 1982 a decision not to retire cadres was the one demanding an interpretation and explanation.

Policymakers also changed the incentive structure to make retirement more attractive to cadres and, presumably, easier for middlemen to execute successfully. Beginning in April 1982 all veteran cadres became eligible for special retirement status and its full pension.[45] For the 2,190,000 veterans of the 1945–49 civil war, pensions increased from 80 to 100 percent of salary. For all veteran cadres, then, retirement no longer brought about a loss in salary. And for those who had joined the Communists before 1945, policymakers provided a retirement bonus,


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equivalent to one to two months' salary, conferred annually after retirement. Amount of bonus depended on period of recruitment to service. These changes are summarized in table 8.2. Policymakers did not change the retirement incentive structure for postrevolutionaries. And by extending special retirement status to all veteran cadres and providing bonuses to some, they exacerbated the gap between veteran cadres and postrevolutionaries. Whereas in 1978 the smallest difference in pensions for the two groups had been 5 percent of salary, in 1982 it became 25 percent. The biggest difference became 57 percent.

While the four features discussed above made cadre retirement a policy with action implications, middlemen proved unwilling or unable to execute it with its formally established incentive structure. They subtly changed the policy in the course of executing it, by increasing incentives to retire. This was a deviation from official policy.

Deviation From Policy

In salary terms the 1982 revised incentive structure eliminated the material disincentive to retire for veteran cadres and provided a small incentive for some. Postrevolutionaries still lost 25 to 40 percent of salary after retirement. However, middlemen provided incentives to retire, above those stipulated in official policy, to veteran cadres and postrevolutionaries. At the workplace, middlemen engaged in bargaining with potential retirees seeking a better retirement deal. At the provincial level, governments issued temporary regulations increasing stipends to postrevolutionaries. In both instances, middlemen responded to pressure and passive resistance from older cadres, the targets of the policy, even when doing so deviated from policy. In short, better incentives seemed to be necessary to get cadres to retire. Middlemen proved themselves unwilling or unable to execute policy successfully, given the official incentive structure. They did not enforce compliance so much as induce cadres to comply.

In an economy where goods and opportunities are scarce and the market mechanism inoperative in distributing them, as is true of the People's Republic of China, the power to obtain things is not always strongly linked to cash income. It is linked also to rank and, more generally, to being a member of a workplace.[46] For these reasons, even a full pension was unlikely to compensate cadres adequately for postretire-


236
 

TABLE 8.2. Retirement Standards, Statuses, Pensions, and Bonuses for Veteran Cadres, 1982

Period of Recruitment

Status

Pension (%)

Bonus (%)

1921–37

special

100

16.6

1937–42

special

100

12.5

1943–45

special

100

8.3

1945–49

special

100

0

NOTE : Pensions are expressed as a percentage of preretirement salary. Bonuses are expressed as percentages of annual preretirement salary and are conferred annually after retirement.

ment losses. Thus the types of benefits potential retirees sought were often different in nature from those the official policy offered.

Although the age criterion provided an objective means of singling out cadres for retirement, middlemen at the workplace did not usually instruct cadres to retire. They engaged in discussions with potential retirees, in the course of which cadres voiced requests to improve their situation in some way. Cadres generally referred to this process as one of "bargaining" (shangliang ). In the description of one retired cadre:

Retirement decisions come from the organization department at the workplace. It has records of how old cadres are who should retire. To get people to retire, the organization department cadres come to talk to you. Cadres bargain with them. They may say: "First you resolve my housing problem or my son's employment problem, and then I will retire." Before the Cultural Revolution, people did whatever the organization told them to do. They went wherever the organization decided they should go. Now, people are not so obedient. The organization has to bargain with them.

Some of the things often bargained for were better housing, a preretirement salary raise, and employment for a son or a daughter. Table 8.3 shows preretirement requests that questionnaire respondents made to middlemen at the workplace. Nearly 85 percent of respondents made such requests. Among them, employment for a son or a daughter was the most common: including those who made more than one request, more than half of all respondents made this request. Providing employment for a son or a daughter was not strictly permissible, but younger cadres interviewed indicated that it was widely practiced. For ordinary cadres especially, with fewer perquisites of position than high-ranking cadres, providing such an incentive could induce early retirement. In Guizhou province, for example, eight thousand cadres had retired early


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TABLE 8.3. Preretirement Requests to Middlemen (Questionnaire Respondents)

Request

No. of Responses

%

Salary

22

9.2

Housing

34

14.2

Employment for son or daughter

113

47.3

Other

7

2.9

No request

37

15.5

&!; 1 request

26

10.9

Total

239

100.0

NOTE : Of those with &!; 1 request, there were 15 requests about salary, 21 requests about housing, 20 requests about employment for a son or daughter, and 3 other requests.

by the end of 1983. Of these early retirements, more than half involved providing employment for a son or a daughter.[47]

Yet another incentive middlemen provided to potential retirees was pro forma retirement, which some cadres referred to as "retirement without leaving the workpost" (lixiu bu li zhi ). Essentially this meant that cadres worked regular hours, at the workplace, attending to the same kind of work as before their retirement. It seems not to have been as common as another postretirement practice: reducing work hours and time spent at the workplace and attending to special projects unconnected with regular work. For example, among questionnaire respondents, 21 percent indicated they spent most of their time after retirement doing work for the former workplace and returned to the workplace at least several times every couple of weeks.[48]

That these efforts served the interests of potential retirees is obvious. However, middlemen also had an interest in providing incentives. Middlemen had an interest in retiring cadres to fulfill campaign quotas to cut staff and promote younger cadres. Even pro forma retirement eliminated cadres from the authorized personnel complement (bianzhi ) and gave workplaces time to find and train replacements. Providing incentives for early retirement was also in the interest of middlemen. Because the practice of lifelong tenure had prevented regular personnel renewal, those directly in line for promotion at middle levels were themselves not young. Part of the campaign to promote younger cadres involved short-


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cutting the regular career ladder and skipping over cadres in their fifties. This created a morale problem among these cadres, whose careers were frozen.[49] Early retirement with a better retirement deal was one way to handle this problem. A postretirement work relation with the workplace was another.

By the end of 1985 more than half of all surviving veteran cadres had retired.[50] However, more than two million cadres had been recruited in 1950–52. In September 1984 Jiao Shanmin, a deputy head of the Ministry of Labor and Personnel, noted that hundreds and thousands of postrevolutionaries had reached the ages of retirement but were not retiring.[51] He cited the discrepancy in pensions between veteran cadres and postrevolutionaries as the main problem, stating that pensions for postrevolutionaries were too low and that retirement seriously affected their standard of living. He concluded that the problem was a serious obstacle to rejuvenating the cadre ranks.

Policymakers had fixed pensions for postrevolutionaries at 60 to 75 percent of salary in 1978, and these had not been changed in 1982. The 1982 increase in pensions for veteran cadres had exacerbated the difference between veteran cadres and postrevolutionaries. In addition, beginning in 1982 there was considerable propaganda on veteran cadre retirement, which very likely increased awareness of that difference. Not surprisingly, there was resentment among postrevolutionaries. As one postrevolutionary explained: "We are all working together—then this distinction. Of course, to distinguish between special retirement and regular retirement is not unreasonable. These veteran revolutionaries deserve some special treatment. But why must it be so much? People are upset not with the distinction itself, but with the size of the gap." Postrevolutionary questionnaire respondents too revealed their dissatisfaction with the difference. As is indicated in table 8.4, 71 percent of postrevolutionaries (18 percent of veteran cadres) considered it unreasonable (bu heli ).

Workplaces in the public sector considered here do not themselves finance the retirement of their cadres. Middlemen at the workplace could not take the initiative to actually increase cadre pensions. Most of the


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TABLE 8.4. Evaluation of Equity of Pension and Benefits Differences for Revolutionaries and Postrevolutionaries, by Recruitment Category (Row Percentages) (Questionnaire Respondents)

 

Evaluation

 

Recruitment Category

Unreasonable

Reasonable

Totals

Revolutionaries

18.4

81.7

100%

     

(158)

Postrevolutionaries

71.0

29.0

100%

     

(69)

Totals

34.4

65.6

100%

 

(78)

(149)

(227)

NOTE: Percentages may not add up because of rounding.

Pearson chi-square value: 59.049

Probability: .000

financial burden for retirement is borne by local governments. Throughout 1986 twenty-five provincial governments adopted measures to increase pensions for postrevolutionaries.[52] The measures adopted, often called temporary regulations, technically did not revise central regulations on retirement. Rather, they provided subsidies or additional maintenance stipends (shenghuo butie ) from provincial budgets for regularly retired cadres.

It is interesting to consider the case of Beijing, a provincial-level municipality and an anomaly in the local revision of cadre retirement policy. The municipal government of Beijing did not issue regulations to increase pensions for regularly retired cadres. Some interview subjects offered as an explanation the view that proximity to the national government meant that Beijing was more likely to act according to official policy. However, middlemen at workplaces in Beijing had their own way of dealing with this issue: they postponed the processing of the retirement of postrevolutionaries, in the expectation that policymakers at the top would soon ratify the informal changes in policy made by virtually all provincial governments. As with other informal deviations, postponement constituted a way of "taking into consideration" (zhaogu ) the interests of targets of the policy. One retired cadre described the situation at the end of 1986 as follows:

[Retirement] has been postponed ... because of the dissatisfaction among cadres about differences in material benefits between special retirement


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and regular retirement. Cadres who do not meet the standards for special retirement are dissatisfied about accepting a smaller pension than cadres who do meet these standards. Thee is no question or complaint about veteran cadres deserving the title of veteran revolutionaries and some honorary status, but there is grumbling about their extra material benefits. So the workplace is putting off processing cadre retirement, because there is a sense that the policy will probably change soon, and the workplace wants to show consideration for the cadres who do not meet special retirement standards but are at the age of retirement. New regulations may come out soon. People are waiting.

Policymakers may have unwittingly sanctioned the deviations by middlemen at the workplace and by the provinces. For example, middlemen could view the concern about low pensions for postrevolutionaries that Jiao Shanmin voiced in 1984 as granting legitimacy to the provincial subsidies. Providing a better retirement deal was consistent with a policy guideline to take into account the special needs of veteran cadres, especially in matters of general well-being.[53] And policy guidelines on the role of veteran cadres in training successors and those on promoting an active postretirement role for veteran cadres seemed to support a continued relation with the workplace after retirement.[54] The blanket exclusion from promotion of all cadres in their fifties was officially criticized, but guidelines suggested that even those in good health should step down if younger, better-qualified candidates for office were available.[55] Even providing employment for a son or a daughter was not entirely without a basis in official policy. It was a corruption of the principle of employment substitution (dingti ), which, under certain circumstances, allowed the workplace to hire one son or daughter of a retiring worker. Employment substitution was not applicable to cadres, however.[56]

Nonetheless, these were, in fact, deviations—not simply permissible interpretations and adaptations of official policy. In September 1983 the Central Committee sharply criticized the extension of employment substi-


241

tution to cadres and placed stringent restrictions on its application, even among workers.[57] The stipend increases for postrevolutionaries were treated somewhat differently. They were clearly viewed as a violation and an irregularity, but in the end policymakers took the local government measures as a signal to review the policy. The State Council issued a report in early 1987, pointing out that the subsidies had created a heavy financial burden on the state and that departments were studying the matter to recommend policy revisions. It asked the localities to take into account the financial burden and the adverse effect of the increases on building a cadre retirement system. However, policymakers did not explicitly demand a repeal of the increases.[58]

Conclusion

For a number of reasons, cadre retirement policy was a policy without action implications in 1978–81. Policymakers gave middlemen conflicting signals, reflecting a lack of consensus at the top. Party and government organizations issued documents with different nuances, and the lack of clear Party support for a policy in a Party-dominated issue area was especially important. Also, middlemen were given another policy to execute, the goals of which conflicted with cadre retirement policy. And policymakers did not constrain middlemen to retire cadres with an objective criterion, such as mandatory retirement at specified ages.

In 1982 middlemen took action to retire cadres. A number of factors explain this. Policymakers signaled agreement at the top and, in particular, Party support of retirement. They eliminated conflicting policy demands on middlemen and introduced mutually reinforcing demands by starting up two campaigns, in which cadre retirement was virtually a prerequisite for success. And they constrained middlemen to retire cadres by making retirement at specified ages the general rule. Policymakers also made the policy easier to execute, by increasing incentives for a large proportion of older cadres to retire.

However, in executing policy middlemen took the interests of potential retirees into consideration. They increased incentives to retire—even when doing so deviated from policy. Thus middlemen proved unwilling or unable to enforce policy. Instead, they induced compliance by making retirement more attractive.


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The evidence presented points toward a number of conclusions about the choices middlemen make after policymakers formulate policy. These can be simply summarized as choices about taking risks, justifying actions, and using resources. When there is a lack of consensus among policymakers, what middlemen do or do not do is a choice that reflects a stand—and potential political risk. Further, middlemen are in positions of responsibility toward policymakers and of authority over ultimate targets of a policy. This means they must justify their actions to both, with reference to policy. Finally, middlemen have a number of tasks in their issue area at any given time. Anything they do consumes limited resources (such as personnel), and when they face contradictory demands they must choose to use resources on one task or another. Because of these choices they make, middlemen are more likely to execute policy or execute it successfully to the degree that policymakers reduce their risks, constrain their actions, and coordinate demands on them.

However, this does not appear to be enough to ensure successful execution of policy. Middlemen need an attractive policy to execute. Ultimate targets of the policy seem to be, not passive policy takers, but discriminating consumers. Middlemen will find ways to make an unattractive policy attractive, even if this means deviating from official policy. The nature of their deviations is inhibited and shaped by both policy content and the formal structure of authority. The degree of latitude for interpretation in policy and the kinds of actions that appear to be sanctioned by policy affect how middlemen make policy more attractive. And middlemen are limited by their formal authority: thus middlemen in one issue area cannot take authoritative actions that span different areas, but local governments can take such actions.

What does this imply about the actual consequences of the formal structure of bureaucratic authority in the policy process? To begin with, the formal structure is meaningful in a couple of ways. First, the distinction between Party and government organizations has action implications in the policy process. When conflicting signals are issued by policy-makers at the top, middlemen weigh those signals differently. In the extraordinarily Party-dominated issue area of cadre management, Party signals were taken as the meaningful guidelines for action. Second, the officially defined span of authority over issue areas channels how policy is implemented. The ways middlemen deviated from formulated policy were constrained by whether their formal authority was limited to one issue area or extended to many.

In short, formal authority relations matter. But much of the behavior of middlemen cannot be explained with reference to those relations. In particular, the nature of deviations in the course of policy implementation reveals an informal structure of constraints and incentives at the


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grass roots. Middlemen proved clearly unwilling or unable to implement what was considered by older cadres to be an unattractive policy. Thus middlemen are keenly responsive to interests of policy targets who have little or no place on charts delineating official authority relations in the policy process. That responsiveness, not represented in the formal organizational design, has a real impact on how policies are transformed into actions.

The actual scope of these generalizations is essentially an empirical matter. However, there are a few features of this case that may restrict its generalizability to other policies. In particular, the tendency of middlemen to provide additional incentives to potential retirees may be quite atypical. Cadre retirement is an unusual policy because of the lack of legitimate precedent for it, the relative absence of risk for targets of the policy in resisting it, and the special resources possessed by these potential retirees.

First, cadre retirement lacked a supportive legacy on which to build. Indeed, Chinese Communist experience attached stigma to exit from office: movement in and out of official position has typically been the result of natural death, political error, or consolidation of personal power from the top. Cadre retirement policy was a new attempt to change a de facto lifelong tenure system that had been in place since the 1950s. This system not only had the legitimacy of habit, but also had been explicitly legitimated as an entitlement of revolutionaries for their role in the Communist rise to power. The notion of cadre, then, was not one of bureaucratic career, but rather one of revolutionary calling. Retirement represented a reinterpretation of what it meant to be a cadre.

In these circumstances, the interests of potential retirees, especially veteran cadres, could not easily be dismissed as illegitimate. Both the magnitude of the change involved and the policy's lack of legitimate precedent were probably influences on the policy process, making it more likely that middlemen would take the interests of potential retirees into consideration. An example of a comparable kind of policy in the same issue area is the elimination of job security for workers and cadres.

Second, and somewhat paradoxically, older cadres could resist retirement and press for an increase in pensions and benefits without major risk. The organization-personnel system is important precisely because it is the system through which the Party controls life chances. Cadre retirement is an atypical problem in this issue area because, to a considerable degree, retirement involves an exit from this system of control. Potential retirees had less to lose in resisting retirement policy, because the outcome was a career end point in any case.

Finally and relatedly, older cadres could draw on resources that targets of other policies might not be expected to possess. This was espe-


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cially true of veteran cadres. Most potential retirees were not leaders and, therefore, did not have a lot of power in the usual sense. However, they had years of Party membership, tenure in office, work experience, and networks of contacts. Veteran cadres restored to office also had prestige, because they were associated with the Party's greatest achievement to date—gaining power. As well, they were often victims of the Cultural Revolution and untainted by the policies of that repudiated period. They were symbols of the Party's better face, at a time when the Party was facing a crisis of faith. Given this situation, middlemen could ill afford to provoke the resistance of potential retirees. They could be expected to adopt a less authoritarian and more concessionary style of executing policy.


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