Why is welfare provision unpopular in China?

Why is welfare provision unpopular in China? Alex C. H. Chang. Democratization, Jul 22 2020. https://doi.org/10.1080/13510347.2020.1789966

ABSTRACT: This article analyses from a cultural perspective why, despite exacerbating income inequality, Chinese people are not in favour of income equality. I argue that the patriotic education campaign initiated in the 1990s encouraged citizens to sacrifice for the greater good of China and caused the Chinese to accept and adapt to a decrease in governmental welfare as well as lessening the demand for it, thus reducing the government’s financial burden of welfare provision. I then test the hypothesis against the Asian Barometer Survey data. The statistical results support my assertion, suggesting that strong patriotic beliefs reduce the preference for social equality, and that private income and economic perspectives do not significantly stimulate the public demand for redistributive policies in China.

KEYWORDS: inequality, preference for redistribution, China, self-sacrifice for national interest, patriotic indoctrination


In the literature on redistributive policies, Meltzer and Richard have famously argued
that people with lower incomes prefer higher income taxes because they have more
to gain and less to lose from government spending on social welfare than persons
with higher incomes.1 Accordingly, their model suggests that redistributive policies
“lean against the wind”2 – that is the more people’s wages fall below the mean
income, the greater their support for government redistributive policies will be.

Practices, however, call into question the validity of Meltzer and Rickard’s theoretical
assumptions. Lindert’s so-called “Robin Hood Paradox”3 shows that increasing income
inequality is actually associated with less rather than more welfare spending.4 Moreover,
individual-level studies have also pointed out that the poor do not necessarily support
high levels of redistribution, nor that the rich consistently disapprove of them.5 The
most straightforward evidence comes from the United States, where inequality is significantly
increasing but welfare policies remain unpopular.6


Conclusion

Conventional wisdom suggests that the less wealthy should favour welfare policies.
However, empirical findings show that the reasons behind individual preferences for
redistributive policies are more complicated than are commonly thought. By reviewing
competing explanations based on neoclassic economic and culturalist approaches, this
article sets out to investigate why welfare provision is not popular among the Chinese in
spite of a growing income gap. In addition to considering individual demographic and
socioeconomic attributes, as well as their subjective perceptions of social status, I have
shown that attitudes towards welfare policies are not influenced by respondents’ selfinterest,
but by their willingness to self-sacrifice for the greater good of China.
Ceteris paribus, the more Chinese agree to set aside their own interests for the sake
of the national interest, the more they are averse to government welfare. Moreover,
the statistics further show that such a patriotic effect on the preferences for welfare provision
is not applicable to young adults born after the institution of the one-child policy.

The findings above have at least three applications. First of all, they shed some light
on issues that are likely to be crucial for the political acceptability of welfare reform programs
and the redistributive theory inspired by the Meltzer-Richard model. Second,
these findings help us with re-examining the developmental trajectory of China as
well as providing suggestions for the increasing attempts at adopting the China
model as a developmental strategy. The prevalence of Chinese collectivist traditions
enables the CCP to simultaneously manipulate both public policies and the society.
From the perspective of government, the patriotic education campaign not only
evoked public support for marketization reforms and self-sacrifice for the modernization
of China from the supply side, but from the demand side it also inspired
Chinese citizens to restrain their demands for redistribution and thus justified the
low government provision of welfare service. In other words, through the manipulation
of traditional Confucian and Maoist ideals, the CCP government successfully inspired
the alleviation of social discontent attributed to increasing economic inequality and
kept the train towards China’s modernization on track without expanding its government
spending on welfare provision.

While the rise of China has gained global attention and the China Model is increasingly
adopted in developing countries, highlighting China’s liberal economic policy and
one-party political system,63 this article reminds us of the importance of cultural and
patriotic forces mediating between government policy and society. The patriotic tradition
in China, as suggested above, provides a cushion for civil grievances against
central planning, avoids potential conflicts between society and government, and
reduces the extent to which the central government utilizes authority to enforce its policies.
This leads me to conclude that without taking cultural differences into account,
the China model might not be successfully replicated in other developing countries.

Last, but not the least, the analysis of Chinese unexpected low support for welfare provision
in spite of the high income inequality reminds us to review the literature of distributive
politics in authoritarian regimes. According to the redistributive theory of
democratization, inequality-induced redistributive conflicts inevitably lead to either
democratization or repression, the two unfavourable outcomes of the CCP. If an autocratic
government can soothe public discontent towards inequality without rendering
welfare service, apparently there is no need to risk its legitimacy to democratize or to
repress. The findings above demonstrate that China has skilfully managed patriotic
campaign and promoted people’s national identity to curtail their demands for welfare
services. This thus avoids China from inequality-induced redistributive conflicts and
subsequent top-down democratization or bottom-up public turmoil. Having said that,
I do not mean to deny the possibility of democratization or even regime change in
China. As shown in the previous discussion, young Chinese have become more pragmatic
and self-interested than the older adults. While they comply with the patriotic indoctrination
and demonstrate their willingness to sacrifice their own interests to the greater
national interests, they have ensured that nationalist beliefs would not conflict with
their demands for government welfare services. In other words, as income inequality
increases along with internationalization and globalization in China, we would expect
growing demands for welfare services to knock the door of democratization in China.