Public Goods Provision in Rural Area: Case From Zhejiang Province of China

Rural public goods are relatively wide concept in economics. Samuelson defined pure public good to be one that is both non-rivalries and non-excludable. Private provision of pure public good is efficient because people are able to free ride. Generally, rural public goods can be divided into two categories: one is public consumption goods and public factors of production. In China, in terms of categories of Ministry of Finance, public expenditure consists of over 20 items, including expenditure for capital construction, innovation funds and science and technology promotion funds, expenditure for supporting agricultural production, expenditure for pension and social welfare, expenses on culture education science and public health, administrative expenses, expenditure for national defence, etc. This paper focuses expenditure for supporting agricultural production in Zhejiang Province, estimating the linkage between agricultural output and public good provision and the role of government expenditure. It consists of five sections. A brief status of Zhejiang province in China is the subject of the next section. Section 3 is Model and Econometric analysis. Section 4 provides marginal production of supporting to agriculture from government. Conclusions and policy implications section highlights the major findings of this paper and gives some suggestions.