Explaining China’s High Welfare Spending: Local Models and Drivers of Fiscally Oriented Affordable Housing

Abstract While the world has been undergoing a global wave of welfare retrenchment since the turn of the 21st century, China’s spending on welfare provision has grown remarkably. Through a comparative study of the public housing provision programmes in two districts within the same municipality, this paper explores models of fiscally oriented public housing provision and their underlying driving forces. Drawing on data from archives, interviews and intensive fieldwork conducted in south-west China from 2014 to 2018, we identify two prominent public housing models: the entrepreneurial model and the extractive model. We propose that the choice of different welfare provision approaches is linked to local fiscal pressures and the target responsibility system. This paper sheds light on the structure of political incentives within China’s local governments in relation to public service provision and explores how local leaders improve public welfare in a non-Western setting.