Do ideology movements and legal intervention matter: A synthetic control analysis of the Chongqing Model

Institutions have a fundamental influence on the economic performance of a regime. Among the various aspects of institutions, ideology and the legal system are two important ones. Chongqing Municipality, a province-level region in China, experienced such a combination with a unique leader from late 2007 to early 2012. This paper investigates, via the Synthetic Control Method, the economic performance of Chongqing in the last 13 years. In particular, it discusses the impact of the red ideology movements and legal intervention undertaken by Bo Xilai. The results reveal that although his economic policies promoted the Chongqing economy, the Maoist political policies advocated by Bo partially undermined its economic growth in the short run.