Promotion of rural development via urban-rural integration in China: compensatory policy instruments and systemic risks

The uncertainty of rural economic activity has led to a tendency for moderate policies promoting rural development. However, the top-down policy formulation and implementation in transitional economies are generally forceful and may result in compensatory policy instruments and systemic risks. Drawing on a case study of the urban-rural integration project of Ranyi in Chengdu, this paper traces the policy instruments applied to promote rural development. It is revealed that the project centred on the top-down ‘Increase-Decrease Linkage’ (IDL) policy generated a complex policy toolkit mixed with risks and compensatory policy instruments. While some risks have been mitigated through compensatory policy instruments as seen in the land consolidation and new village development of Ranyi, issues such as failed employment provision or long-term residential risks, as these targets conflict with local market conditions. This study prompts a re-examination of policy mix theory. Although policy instruments were mixed to achieve functional complementarity, they only partially mitigated implementation risks and proved ineffective in achieving policy objectives in the absence of market response. Specifically for transitional economies, the patchwork accumulation of policy instruments resulting from top-down policy arrangements can easily amplify negative effects and risks. Further research with multi-case comparisons and mixed-methods approaches is suggested.