This dissertation explores why some commendable policy goals set by the central government of China have been left unmet at the local levels. Observing the significance of policy behaviors of local officials in producing policy outcomes in their jurisdictions, it attributes the apparent policy distortion to the "incorrect" incentives that local officials face now. Different from those focusing on the new economic incentive offered by the new decentralization arrangement during the reform era, this study looks into the nature of political incentives embedded in the oldtop-down cadre management system to see how local officials are "incentivized" politically to produce distorted policy outcomes.

By investigating formal rules governing local chiefs' turnovers and actual past turnovers of the prefectural chiefs in Zhejiang and Hubei provinces during the reform era, this study finds out that the top-down political incentive is unbalanced by nature in that promotion criteria for local chiefs slant heavily to local chiefs' achievements (zhengji) in promoting local economic growth while their performance in other policy issues are neglected at large. It argues that such unbalanced nature of top-down political incentive has induced local officials to divert more efforts to pursue "mindless" economic growth at the cost of other commendable goals; policy distortion therefore emerges as the consequence of unbalanced political incentive.

This dissertation continues to explain why the apparent policy distortion has persisted. By investigating five cases illustrating the way the center deals with local policy distortion, it argues that the central government is unwilling, unable and ineffective to sanction policy distortion because of the innate conflict between the indirect management tool the center uses and the multiple governance goals it desires for. The unbalanced nature of current top-down political incentive is therefore predetermined and policy distortion persists.

This dissertation contributes to the general discussion on central-local dynamics in China by bringing back the top-down political incentives as the most important institutional cause for policy outcome. Policy implication of this study is clear: the problem of policy distortion could not be solved without reshuffling the top-down political incentive system.