Bringing in horizontal strategic interactions: local governments’ bandwagon strategy and its implications for performance management

Abstract

Gaming, one of the most noticeable “diseases” plaguing performance management, has attracted abundant scholarly attention. Adopting the perspective of methodological individualism, the extant literature, however, has neglected the horizontal strategic interactions among local governments. This study develops a formal game-theoretic model to investigate the bandwagon strategy, a particular type of horizontal gaming strategy, in the context of China’s Energy Conservation and Emission Reduction (ECER) policy and applies spatial econometric methods to empirically confirm the existence of such a bandwagon strategy. Our findings suggest that horizontal gaming strategies should be taken seriously to improve the efficacy of performance management.