Abstract:

Both the central government and local governments are important subjects for policy experimentation, within which their roles have a logic of mutual conversion. Factors such as policy goals, politics, risks, costs, and benefits have a significant impact on the transformation of their roles. When policy objectives are vague, the central government will delineate political risk red-lines, using risk investment strategies. However, when clear policy objectives and controllable risks are presented, the central government will provide a top-level design. After considering a local government’s resources and risk exposure, the center will choose a single “point” strategy. Shenzhen’s experience with policy experimentation provides ample evidence of the phenomenon.

Key words: central-local relationship, policy experiment, role transformation, policy objective, political risk