Institutional Proliferation: How the Social Credit System Ensures Compliance

• In Event: Technologies of Governance in China: Law, Campaigns, and Social Credit

Abstract

Autocrats want to secure compliance with laws, regulate market players, and deter rule-violating behavior. However, they remain wary of strengthening the judicial institutions that are necessary to achieve these goals but could undermine autocratic power. How do autocrats resolve this legal dilemma? I argue that the answer lies in institutional proliferation, the creation of new information-consolidating and punitive institutions. Implications of this theory are tested through an empirical examination of the social credit system in China. I propose that the social credit system (1) shares the same goals as existing institutions and (2) addresses their limitations. Using original data on local implementation of the social credit system, I show that its major targets are commercial actors, and that reasons for punishment under the social credit system are closely tied to existing laws and regulations. Multiple government agencies contribute to the social credit system, illustrating its information-consolidation function. Finally, the social credit system also doles out additional punishments to increase enforcement. The paper then investigates the effects of the social credit system on law implementation. Taking advantage of the phased-in local enactment of the social credit system and newly collected panel data, I use a difference-in-differences design to demonstrate that the social credit system improves the enforcement of laws but does not lead to increased political power of the courts.

Author

• Haemin Jee, United States Military Academy, West Point