The provision of public goods by a local entrepreneurial state: The case of perservation of the Nanyue relics in China

In 1995, relics of the royal palace of the ancient Nanyue Kingdom were, for the first time, excavated in Guangzhou, the provincial capital of Guangdong in south China. As the site is situated at the very business centre of the city, preservation of the relics at the original location would be highly costly. Conflict thus emerged between archaeological consideration and economic calculation. In the end, the Guangzhou municipal government decided to preserve the relics, though at huge compensation and displacement cost. The case has led to the question of how an intergenerational, non-factor-attracting public good (relic preservation) could be provided by an economic-oriented local government (Guangzhou)? This article will tackle the question using the public choice approach. It will explain the political logic of the case in terms of the emergence of a new civil service system in China. Some theoretical implications of such an approach will be considered.