This study investigates what drives local variations when pursuing urban–rural equity in social welfare provision in China. We examine how internal features, top-down pressure and horizontal competition have shaped local governments’ decisions to adopt a policy that unifies (yitihua) the urban and rural eligibility thresholds of the world's largest means-tested cash transfer programme (dibao). We collected and coded policies that unify urban–rural dibao thresholds in 336 prefecture-level divisions between 2011 and 2019. Event history analysis showed that internal fiscal constraint – primarily cost concerns – drove local policy adoption; top-down pressure from provincial governments with a high degree of coercive power in policy directives exerted a significant impact; and the horizontal competition's effect was insignificant. Our findings indicate that fiscal arrangements and top-down policy directives from superior governments with higher coercive power are potent tools to accelerate the adoption of a social welfare policy that would otherwise be unappealing for local officials.
