Local Government Administration

162 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 ofgovernment.8 In practice,though,local civil servants enjoy lifelong employment.The organizational structure and the total number ofcivil 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 ofa 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 oflocal governments.The departments ofa local government can be roughly divided into two groups.The first group is exclusively under the leadership ofthe local government,and the leaders ofthe department report directly to the leaders ofthe local government.In this case,the local government determines the hiring and firing ofdepartment employees.The second group is under the leadership ofboth the local government and the same department in the higher-level government. For example,the local tax agency is a department oflocal government and financed by local government,but it is also under the leadership ofthe local tax agency ofthe higher-level government.In that case,the hiring and firing ofemployees ofthose departments are determined by the higher-level government.

Local SOEs,public schools,hospitals,and other public service units are also regarded as part oflocal government.Local governments determine the hiring and firing oftheir executive bodies,but in general the hiring