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The Effects of Democratization on Public Goods and Redistribution: Evidence from China

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  • Yang Yao
  • Monica Martinez Bravo
  • Gerard Padro i Miquel
  • Nancy Qia

Abstract

This study investigates the effects of introducing elections on public goods and redistribution in rural China. A large and unique survey was collected to document the history of political reforms and economic policies and exploit the staggered timing of the introduction of elections for causal identification. It was found that elections significantly increase public goods expenditure. The increase corresponds to demand and is paralleled by an increase in public goods provision and local taxes. IT that elections cause significant income redistribution within villages. The results support the basic assumptions of recent theories of democratization. In addition, we show that the main mechanism underlying the effect of elections is increased leader incentives.

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  • Yang Yao & Monica Martinez Bravo & Gerard Padro i Miquel & Nancy Qia, 2012. "The Effects of Democratization on Public Goods and Redistribution: Evidence from China," Working Papers id:5011, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:5011
    Note: Institutional Papers
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    Cited by:

    1. Chen, Yuyu & Naidu, Suresh & Yu, Tinghua & Yuchtman, Noam, 2015. "Intergenerational mobility and institutional change in 20th century China," Explorations in Economic History, Elsevier, vol. 58(C), pages 44-73.
    2. Anusha Nath, 2018. "Bureaucrats and Politicians: Electoral Competition and Dynamic Incentives," 2018 Meeting Papers 896, Society for Economic Dynamics.
    3. Gerard Padro i Miquel & Nancy Qian & Yang Yao, 2012. "Social Fragmentation, Public Goods and Elections: Evidence from China," NBER Working Papers 18633, National Bureau of Economic Research, Inc.
    4. Pal, Sarmistha & Wahhaj, Zaki, 2017. "Fiscal decentralisation, local institutions and public good provision: evidence from Indonesia," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 383-409.
    5. Moricz, Sara & Sjöholm, Fredrik, 2014. "The Effect of Elections on Economic Growth: Results from a Natural Experiment in Indonesia," Working Papers 2014:15, Lund University, Department of Economics.
    6. Dan Pan & Ruiyao Ying & Zuhui Huang, 2017. "Determinants of Residential Solid Waste Management Services Provision: A Village-Level Analysis in Rural China," Sustainability, MDPI, vol. 9(1), pages 1-15, January.
    7. Petra Persson & Ekaterina Zhuravskaya, 2016. "The Limits of Career Concerns in Federalism: Evidence from China," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 338-374.
    8. Aldashev, Gani & Zanarone, Giorgio, 2017. "Endogenous enforcement institutions," Journal of Development Economics, Elsevier, vol. 128(C), pages 49-64.
    9. Siqi Zheng & Matthew E. Kahn, 2013. "Understanding China's Urban Pollution Dynamics," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 731-772, September.
    10. Kahsay, Goytom Abraha & Medhin, Haileselassie, 2020. "Leader turnover and forest management outcomes: Micro-level evidence from Ethiopia," World Development, Elsevier, vol. 127(C).
    11. Beath, Andrew & Christia, Fotini & Enikolopov, Ruben, 2013. "Do elected councils improve governance ? experimental evidence on local institutions in Afghanistan," Policy Research Working Paper Series 6510, The World Bank.
    12. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    13. Zhang, Jing & Gan, Li & Xu, Lixin Colin & Yao, Yang, 2014. "Health shocks, village elections, and household income: Evidence from rural China," China Economic Review, Elsevier, vol. 30(C), pages 155-168.
    14. Zhang, Jinan & Perloff, Jeffrey M. & Lu, Fangwen, 2020. "Informing and inquiring: Experimental evidence on reducing traffic violations," Journal of Development Economics, Elsevier, vol. 147(C).
    15. Mu, Ren & Zhang, Xiaobo, 2014. "Do elected leaders in a limited democracy have real power? Evidence from rural China," Journal of Development Economics, Elsevier, vol. 107(C), pages 17-27.
    16. Hoken, Hisatoshi, 2016. "Participation in farmer's cooperatives and its effects on agricultural incomes : evidence from vegetable-producing areas in China," IDE Discussion Papers 578, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    17. Verena Kroth & Valentino Larcinese & Joachim Wehner, 2016. "A Better Life for All? Democratization and Electrification in Post-Apartheid South Africa," STICERD - Economic Organisation and Public Policy Discussion Papers Series 60, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    18. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2013. "Democracy, Redistribution and Inequality," NBER Working Papers 19746, National Bureau of Economic Research, Inc.
    19. Nancy Qian, 2014. "Making Democracy Work: The Effects of Social Capital and Elections on Public Goods in China," 2014 Meeting Papers 1414, Society for Economic Dynamics.

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    More about this item

    Keywords

    Elections; Institutions; Democracy; China; Rural; Political; Economic; Reforms; Taxes; Public Goods;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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