Beyond tradeoffs: How Do Local Governments Synergize Multiple Complementary Goals?

Public organizations usually have multiple goals. As studies have mainly focused on how public organizations make tradeoffs between competitive goals, little is known about how they achieve synergies between complementary goals. Using panel data on Chinese prefecture-level cities, this paper investigates the complementary goal interactions by examining how local governments set and adjust their personal income growth goals with reference to their GDP growth goals. The empirical results show that city governments with higher GDP growth goals tend to set higher personal income growth goals. Moreover, when cities’ elasticity of personal income to GDP increases, the positive influence of city governments’ GDP growth goals on their personal income growth goals strengthens. This paper contributes to multi-goal setting theory by shifting the focus from competitive goal interactions to complementary goal interactions and identifying the potential factors that strengthen such complementary goal interactions.