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

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  • Monica Martinez-Bravo
  • Gerard Padró i Miquel
  • Nancy Qian
  • Yang Yao

Abstract

This study investigates the effects of introducing elections on public goods and redistribution in rural China. We collect a large and unique survey to document the history of political reforms and economic policies and exploit the staggered timing of the introduction of elections for causal identification. We find 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. We also find that elections cause significant income redistribution within villages. The results support the basic assumptions of recent theories of democratization (Acemoglu and Robinson, 2000; Lizzeri and Persico, 2004). In addition, we show that the main mechanism underlying the effect of elections is increased leader incentives.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18101.

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Date of creation: May 2012
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Handle: RePEc:nbr:nberwo:18101

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  1. Monica Martinez-Bravo & Gerard Padró i Miquel & Nancy Qian & Yang Yao, 2011. "Do Local Elections in Non-Democracies Increase Accountability? Evidence from Rural China," NBER Working Papers 16948, National Bureau of Economic Research, Inc.
  2. Rozelle Scott & Boisvert Richard N., 1994. "Quantifying Chinese Village Leaders' Multiple Objectives," Journal of Comparative Economics, Elsevier, vol. 18(1), pages 25-45, February.
  3. Loren Brandt & Scott Rozelle & Matthew A. Turner, 2004. "Local Government Behavior and Property Right Formation in Rural China," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(4), pages 627-, December.
  4. Daron Acemoglu & James A. Robinson, 2006. "Persistence of Power, Elites and Institutions," NBER Working Papers 12108, National Bureau of Economic Research, Inc.
  5. Monica Martinez-Bravo, 2013. "The Role Of Local Officials In New Democracies: Evidence From Indonesia," Working Papers wp2013_1302, CEMFI.
  6. Benjamin A. Olken, 2007. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia," Journal of Political Economy, University of Chicago Press, vol. 115, pages 200-249.
  7. Ernesto Dal Bó & Martín Rossi, 2008. "Term Length and Political Performance," NBER Working Papers 14511, National Bureau of Economic Research, Inc.
  8. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2002. "Local governance and public goods provision in rural China:," EPTD discussion papers 93, International Food Policy Research Institute (IFPRI).
  9. Loren Brandt & Matthew A. Turner, 2007. "The Usefulness Of Imperfect Elections: The Case Of Village Elections In Rural China," Economics and Politics, Wiley Blackwell, vol. 19(3), pages 453-480, November.
  10. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
  11. Xin Meng & Nancy Qian & Pierre Yared, 2010. "The Institutional Causes of China's Great Famine, 1959-61," NBER Working Papers 16361, National Bureau of Economic Research, Inc.
  12. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, vol. 95(2), pages 50-55, May.
  13. Gene M. Grossman & Elhanan Helpman, 2002. "Special Interest Politics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571676, December.
  14. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. A Natural Experiment in Chinese Villages
    by missiaia in NEP-HIS blog on 2012-07-03 13:30:04
  2. Human Resources in Great Britain in the Long Run, 1871-2011
    by missiaia in NEP-HIS blog on 2012-08-24 12:34:36
  3. Human Resources in Great Britain in the Long Run, 1871-2011
    by missiaia in NEP-HIS blog on 2012-09-13 10:16:17
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Cited by:
  1. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2014. "Democracy Does Cause Growth," NBER Working Papers 20004, National Bureau of Economic Research, Inc.
  2. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2013. "Democracy, Redistribution and Inequality," NBER Working Papers 19746, National Bureau of Economic Research, Inc.
  3. Gani Aldashev & Giorgio Zanarone, 2014. "Endogenous Enforcement Institutions," Working Papers 1403, University of Namur, Department of Economics.
  4. 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.
  5. Siqi Zheng & Matthew E. Kahn, 2013. "Understanding China's Urban Pollution Dynamics," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 731-72, September.
  6. 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.
  7. 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.

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