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Baoyun Qiao and Anwar Shah
less easily controlled than explicit government borrowing, given the lack of transparency. It encourages rent-seeking and weakens local government accountability.
Local Government Administration In principle, all local governments at and above the county level have the authority to hire and fire local employees within the ceilings established by the next-higher level of government.8 In practice, though, local civil servants enjoy lifelong employment. The organizational structure and the total number of civil servants in provincial governments require approval by the central government. The organizational structure and the number of employees in lower-level governments must be approved by the higher-level governments. The central government sets the basic requirements for local hiring and firing. However, the principle does not apply to township governments. Township governments do not have the authority to hire and fire local staff members. Instead, hiring and firing must be done by the county government to which a township is subject. This principle also does not apply to high-ranking officers of a government. In general, the authority to hire and fire high-ranking officers may not belong to the local government that the civil servant works for. Most senior officers in a local government are hired and fired by the next-higher level of government. Moreover, the principle does not apply to some special departments of local governments. The departments of a local government can be roughly divided into two groups. The first group is exclusively under the leadership of the local government, and the leaders of the department report directly to the leaders of the local government. In this case, the local government determines the hiring and firing of department employees. The second group is under the leadership of both the local government and the same department in the higher-level government. For example, the local tax agency is a department of local government and financed by local government, but it is also under the leadership of the local tax agency of the higher-level government. In that case, the hiring and firing of employees of those departments are determined by the higher-level government. Local SOEs, public schools, hospitals, and other public service units are also regarded as part of local government. Local governments determine the hiring and firing of their executive bodies, but in general the hiring
