what motivates politicians is real power, not just formal rank. Indeed, within the same rank, the amount of power and rents differ greatly among official positions. A rich and populous prefecture-level city could have a total GDP that is 50-100 times as large as that in another poor city. The same PS position in a larger and more prosperous city, thus, implies greater power, and a lateral move (i.e., with the same hierarchical rank) to such a position should be counted and is widely viewed as a promotion. The importance of positional power (without regard to rank) is a worldwide phenomenon, as demonstrated by the relatively low “rank” of Robert Moses (“park commissioner of New York” among other similarly-ranked posts) despite his vast power comparable to even governors (Caro 1974). In coding, we thus take into account not only their hierarchical ranks but also changes in real power between the city secretary’s current position and the destination position. See Appendix B for details of how we code promotions, lateral moves, and demotions.

Among all the 1,178 city-leader pairs, less than a quarter were promoted and more than a third were demoted.<sup>25</sup> The demotion rate is much higher than that of Li and Zhou (2005) for provincial leaders between 1979 and 1995, possibly due to our more thorough and exhaustive way of categorizing promotions, lateral moves and demotions.<sup>26</sup> The patterns also indicate stronger career incentives for local politicians: both upside and downside potentials are substantial and real.

Figure 1 illustrates promotion rates by the number of years in the PS position. Overall, the likelihood of promotion decreases as the number of years in office increases. When the PS stays in the position for more than 5 years, the chances of promotion drop sharply. The fifth year can be viewed as the last fast-track train to promotions. Therefore, we assume that the promotion incentive should be the strongest as the number of years in office approaches five when the full term expires and the typical wholesale changes of government cadres happen.

# **3.3 Other data**

We also collect data of city-level socioeconomic conditions from 2000 to 2013. The variables include the level and growth rate of GDP, electricity consumption, population, and the shares of industrial and tertiary value added in GDP, all from _the China City Statistical Yearbooks_ , supplemented by _the Statistical Yearbooks on Regional Economy_ and the statistical yearbooks of provinces. Data on provincial and prefectural GDP growth targets are from _the Report on the Work of the Government_ of the corresponding administrative units. In our analysis, we focus on all the prefectural and subprovincial level cities, but exclude prefectures, autonomous prefectures and leagues.<sup>27</sup> The final panel contains observations for 281 localities for 13 years. Descriptive statistics of these variables are in

> 25 We fail to find information on destination positions for 22 city-leader pairs. 26 The promotion and demotion rates would differ for the provincial leaders and prefecture leaders as well. 27 This is because these prefecture-level administrative units lack data on some key socioeconomic variables. 12