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

  • Yang Yao
  • Monica Martinez Bravo

    ()

  • Gerard Padro i Miquel

    ()

  • Nancy Qia

    ()

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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Paper provided by eSocialSciences in its series Working Papers with number id:5011.

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Date of creation: Jun 2012
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Handle: RePEc:ess:wpaper:id:5011
Note: Institutional Papers
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  1. Rodrik, Dani, 1998. "Democracies Pay Higher Wages," CEPR Discussion Papers 1776, C.E.P.R. Discussion Papers.
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  4. 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.
  5. Rozelle Scott & Boisvert Richard N., 1994. "Quantifying Chinese Village Leaders' Multiple Objectives," Journal of Comparative Economics, Elsevier, vol. 18(1), pages 25-45, February.
  6. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December.
  7. Benjamin Olken, 2005. "Monitoring corruption: Evidence from a field experiment in indonesia," Natural Field Experiments 00317, The Field Experiments Website.
  8. Meng, Xin & Qian, Nancy & Yared, Pierre, 2010. "The Institutional Causes of China's Great Famine, 1959-61," CEPR Discussion Papers 8012, C.E.P.R. Discussion Papers.
  9. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
  10. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
  11. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
  12. Gene M. Grossman & Elhanan Helpman, 2002. "Special Interest Politics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571676, June.
  13. Rozelle, Scott & Li, Guo, 1998. "Village Leaders and Land-Rights Formation in China," American Economic Review, American Economic Association, vol. 88(2), pages 433-38, May.
  14. Daron Acemoglu & James A. Robinson, 2000. "Why Did The West Extend The Franchise? Democracy, Inequality, And Growth In Historical Perspective," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1167-1199, November.
  15. 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.
  16. Luo, Renfu & Zhang, Linxiu & Huang, Jikun & Rozelle, Scott, 2007. "Elections, fiscal reform and public goods provision in rural China," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 583-611, September.
  17. Casey B. Mulligan & Xavier Sala-i-Martin & Ricard Gil, 2003. "Do Democracies Have Different Public Policies than Nondemocracies?," NBER Working Papers 10040, National Bureau of Economic Research, Inc.
  18. Daron Acemoglu & James A. Robinson, 2006. "Persistence of Power, Elites and Institutions," NBER Working Papers 12108, National Bureau of Economic Research, Inc.
  19. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
  20. 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.
  21. Monica Martinez-Bravo, 2014. "The Role of Local Officials in New Democracies: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 104(4), pages 1244-87, April.
  22. Mu, Ren & Zhang, Xiaobo, 2011. "The role of elected and appointed village leaders in the allocation of public resources: Evidence from a low-income region in China," IFPRI discussion papers 1061, International Food Policy Research Institute (IFPRI).
  23. 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.
  24. Shen, Yan & Yao, Yang, 2008. "Does grassroots democracy reduce income inequality in China?," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2182-2198, October.
  25. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
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