Bureaucratic politics, innovation compatibility, and the dynamic diffusion of subnational decentralization reforms in China

Abstract Despite the widely recognized significance of policy attributes in explaining innovation diffusion, limited research has emphasized the underlying endogenous mechanisms dictating the construction of innovation attributes. This study points out that bureaucratic politics could dynamically shape an innovation's compatibility with the potential adopters and its diffusion likelihood. Based on the subnational decentralization reforms in China, we note that compared to administrative and fiscal decentralization, political decentralization is less likely to generate personal gains and more likely to negatively affect the career prospects of local officials in a layer‐by‐layer personnel management system. Therefore, the study speculates that political decentralization reforms have a lower level of compatibility, consequently reducing its diffusion likelihood among local governments. We confirmed our theoretical expectations by conducting an in‐depth case study of the top‐down diffusion of three types of “Province‐Managing‐County Reforms” among 102 counties in China's Henan Province (2004–2021).