How to best maintain public goods under conditions of chronic resource shortage and insufficient state administrative capacity is a challenge for nearly all developing states. This article concentrates on a range of attempted reforms in China's forestry sector in the 1990s. It first evaluates the dynamics of long-standing “leakiness” in forestry conservation initiatives. After a set of major floods in 1998, major uncertainties remained as to how to effectively implement conservation initiatives, given systemic underfunding and patchy administrative supervision from higher levels. The article then argues that higher (central and provincial) levels of the state have employed measures substantially unchanged since late imperial times: (1) the partial rationalization and extension of formal bureaucratic systems of direct control, and (2) the manipulation of moral incentives through exhortation and appeals to a complex trope of “cadre quality,” concluding that subjective notions of moral “character” in local leadership can combine with objective economic and infrastructural factors to either support or undercut central state initiatives.

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