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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. Meng, Xin & Qian, Nancy & Yared, Pierre, 2010. "The Institutional Causes of China's Great Famine, 1959-61," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8012, C.E.P.R. Discussion Papers.
  2. Yang Yao & Nancy Qia & Monica Martinez Bravo & Gerard Padro i Miquel, 2011. "Do Local Elections in Non-Democracies Increase Accountability? Evidence from Rural China," Working Papers id:3931, eSocialSciences.
  3. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, American Economic Association, vol. 98(1), pages 267-93, March.
  4. Brandt, Loren & Rozelle, Scott & Turner, Matthew A., 2002. "Local Government Behavior And Property Rights Formation In Rural China," Working Papers, University of California, Davis, Department of Agricultural and Resource Economics 11988, University of California, Davis, Department of Agricultural and Resource Economics.
  5. Gene M. Grossman & Elhanan Helpman, 2002. "Special Interest Politics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571676, December.
  6. Monica Martinez-Bravo, 2014. "The Role of Local Officials in New Democracies: Evidence from Indonesia," American Economic Review, American Economic Association, American Economic Association, vol. 104(4), pages 1244-87, April.
  7. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, Springer, vol. 1(1), pages 1-27, March.
  8. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, Elsevier, vol. 88(12), pages 2857-2871, December.
  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, Wiley Blackwell, vol. 19(3), pages 453-480, November.
  10. Ernesto Dal Bó & Martín Rossi, 2008. "Term Length and Political Performance," NBER Working Papers 14511, National Bureau of Economic Research, Inc.
  11. Benjamin Olken, 2005. "Monitoring corruption: Evidence from a field experiment in indonesia," Natural Field Experiments 00317, The Field Experiments Website.
  12. Rozelle Scott & Boisvert Richard N., 1994. "Quantifying Chinese Village Leaders' Multiple Objectives," Journal of Comparative Economics, Elsevier, vol. 18(1), pages 25-45, February.
  13. Dani Rodrik & Romain Wacziarg, 2005. "Do Democratic Transitions Produce Bad Economic Outcomes?," American Economic Review, American Economic Association, American Economic Association, vol. 95(2), pages 50-55, May.
  14. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, 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. 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.
  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. 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.
  4. Gani Aldashev & Giorgio Zanarone, 2014. "Endogenous Enforcement Institutions," Working Papers 1403, University of Namur, Department of Economics.
  5. Mu, Ren & Zhang, Xiaobo, 2014. "Do elected leaders in a limited democracy have real power? Evidence from rural China," Journal of Development Economics, Elsevier, Elsevier, vol. 107(C), pages 17-27.
  6. Moricz, Sara & Sjöholm, Fredrik, 2014. "The Effect of Elections on Economic Growth: Results from a Natural Experiment in Indonesia," Working Papers, Lund University, Department of Economics 2014:15, Lund University, Department of Economics.
  7. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2014. "Democracy Does Cause Growth," NBER Working Papers 20004, National Bureau of Economic Research, Inc.

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