Authoritarian Containment? The Contracting Out of Social Welfare Delivery to NGOs in China

The most recent phase in China’s welfare reforms entails the spread of the contracting-out approach, whereby local governments at the municipal level and below rely on NGOs for social welfare delivery. Pioneered in major cities such as Shanghai and Shenzhen, the outsourcing of public services became national policy in 2013. Local governments are now required to purchase services from NGOs and so-called nonprofit incubators have also been set up in several cities to promote capacity building for the contracting out of social services to NGOs. Meanwhile, changes in the regulatory landscape for Chinese NGOs have altered their registration requirements and management. The Chinese government has invested significantly in social organizations, while promoting a public discourse that emphasizes the importance of government-NGO collaboration in service delivery. As such, these reforms lie at the intersection of welfare restructuring, civil society development, and authoritarian consolidation. Although governmental contracting out of welfare services to NGOs is relatively common in post-industrial countries, it represents a new endeavour in China. Why and how would a single-party authoritarian regime increase the provision of public services by encouraging the development of a growing and increasingly professional nonprofit sector? Based on a qualitative research design that combines several months of fieldwork with documentary research, this paper argues that the contracting out approach represents a strategy of containment aimed at maintaining social stability and shaping linkages between the nonprofit sphere and party-state actors, while containing the political pluralization potential of the former. This paper explores the process of reform in Shanghai and highlights a number of mechanisms underlying the process of policy change.