China’s economic miracle has seriously challenged conventional wisdom that highlights the critical role of property rights protection, an independent legal system, and a democratic system of checks and balances in sustaining long term growth. By international standards, China ranks low in terms of all these institutional fundamentals. Further, the sustainability of China’s rapid economic growth has been threatened by a host of accompanying problems and challenges such as environmental pollution, alarming income inequality, regional disparity, under-funded social security, and bureaucratic corruption. Incentives and Governance: China’s Local Governments aims to unravel the institutional arrangements behind China’s rapid, sustained economic growth and to examine the downsides of these arrangements. To this end, the author constructs a unified conceptual framework focusing on the incentives of local officials and government governance.