Decentralization and political career concerns

Politicians' career paths often start at some subnational governments and end at the national one. Allocation of authorities among national and subnational governments affects (i) how tempting the prospects of taking national offices are, and hence how strong bureaucrats' political career concerns are, and (ii) whether the incentives generated by these political career concerns can be put into productive use at subnational governments. We illustrate this tradeoff in determining the optimal degree of decentralization using China as a case study. We also compare the equilibrium degree of decentralization in autocracy and in democracy.