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Many governments have engaged in policy experimentation in various forms to resolve uncertainty and facilitate learning. However, little is understood about the characteristics of policy experimentation, and how the structure of experimentation may affect policy learning and policy outcomes. In this project, we aim to describe and understand China's policy experimentation since the 1980s, among the largest and most systematic in recent history. We collect comprehensive data on policy experimentation conducted in China over the past 4 decades by 98 ministries and commissions. We find three main results. First, more than 80\% of the experiments exhibit positive sample selection in terms of a locality's economic development, and much of the positive selection can be attributed to misaligned incentives across political hierarchies. Second, local politicians exert greater effort and allocate more local resources to ensure the success of experiments, and such effort is not replicable when policies roll out to the entire country. Third, the presence of sample selection and strategic effort is not fully accounted for by the central government, thus affecting policy learning and distorting national policies originating from the experimentation. Taken together, these results suggest that while China's bureaucratic and institutional conditions make its policy experimentation at such scale possible, such complex political environment can also limit the scope and bias the direction of policy learning.
David Y. Yang is an Assistant Professor in the Department of Economics at Harvard University, a Faculty Research Fellow at NBER and a Global Scholar at CIFAR. David’s research focuses on political economy, behavioral and experimental economics, economic history, and cultural economics. In particular, David studies the forces of stability and forces of changes in authoritarian regimes, drawing lessons from historical and contemporary China. David received a B.A. in Statistics and B.S. in Business Administration from University of California at Berkeley, and PhD in Economics from Stanford.