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Political trust, risk preferences, and policy support: A study of land-dispossessed villagers in China

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  • Cai, Meina
  • Liu, Pengfei
  • Wang, Hui

Abstract

This paper examines how political trust across local government levels and risk preferences impact individual support to land-taking compensation policies in China. Land expropriation becomes a touchstone for protests and conflict during China’s urbanization, driving local governments to diversify land-taking compensation from the traditional one-time lump-sum cash payment to multiple payments, notably, in the form of monthly pension payments and yearly dividends. We found that political trust in the county-level government positively correlates with individual support to pension payments; political distrust in the village collective induces villagers to favor the one-time payment to yearly dividends. Both risk-averse and risk-seeking individuals prefer the one-time cash payment to yearly dividends. The findings are developed using two choice experiments embedded in an original survey: we elicit individual policy support by asking villagers to state their preferences over hypothetical alternative compensation policies; we elicit risk preferences using a lottery-choice experiment with varying probability of winning real monetary rewards. The findings highlight the multi-level local government structure under decentralization and offer insight into to what extent the government efforts in innovative compensation policies are effective at quelling rural anger.

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  • Cai, Meina & Liu, Pengfei & Wang, Hui, 2020. "Political trust, risk preferences, and policy support: A study of land-dispossessed villagers in China," World Development, Elsevier, vol. 125(C).
    • Handle: RePEc:eee:wdevel:v:125:y:2020:i:c:s0305750x19303353
    DOI: 10.1016/j.worlddev.2019.104687
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    5. Keefer, Philip & Scartascini, Carlos & Vlaicu, Razvan, 2022. "Demand-side determinants of public spending allocations: Voter trust, risk and time preferences," Journal of Public Economics, Elsevier, vol. 206(C).
    6. Xin, Zhang & Chen, Zhigang & Kwan, Mei-Po, 2025. "From informality to influence: Nonlinear disturbances and institutional modulation in China's urban land supply," Land Use Policy, Elsevier, vol. 158(C).
    7. Wang, Chunxiao & Hao, Yu, 2026. "Can corporate good deeds reduce environmental injustice? Evidence from China," World Development, Elsevier, vol. 199(C).
    8. Bao, Helen X.H. & Jiang, Yan & Wang, Ziyou & Feng, Lei, 2024. "Social capital and the effectiveness of land use policies: Evidence from rural China," Land Use Policy, Elsevier, vol. 139(C).
    9. Liu, Min & Liu, Pengfei & Huang, Kaixing, 2024. "Combining private and common property management: The impact of a hybrid ownership structure on grassland conservation," Journal of Environmental Economics and Management, Elsevier, vol. 128(C).
    10. Alessandro, Martin & Cardinale Lagomarsino, Bruno & Scartascini, Carlos & Streb, Jorge & Torrealday, Jerónimo, 2021. "Transparency and Trust in Government. Evidence from a Survey Experiment," World Development, Elsevier, vol. 138(C).
    11. Krajewska, Małgorzata & Szopińska, Kinga & Siemińska, Ewa, 2021. "Value of land properties in the context of planning conditions risk on the example of the suburban zone of a Polish city," Land Use Policy, Elsevier, vol. 109(C).
    12. Youxing Zhang & Peter Howley & Clemens Hetschko, 2025. "Happy citizens trust their rulers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 38(3), pages 1-28, September.
    13. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, August.
    14. De Zhou & Ruilin Tian & Zhulu Lin & Liming Liu & Junfeng Wang & Shijia Feng, 2022. "Spatial-Temporal Evolution and Risk Assessment of Land Finance: Evidence from China," Risks, MDPI, vol. 10(10), pages 1-27, October.

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