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Does It Pay to Be a Cadre? Estimating the Returns to Being a Local Official in Rural China

Author

Listed:
  • Zhang, Jian

    (Central University of Finance and Economics)

  • Giles, John T.

    (World Bank)

  • Rozelle, Scott

    (Stanford University)

Abstract

Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre. Given the increasing returns to non-agricultural employment since China‘s economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages.

Suggested Citation

  • Zhang, Jian & Giles, John T. & Rozelle, Scott, 2012. "Does It Pay to Be a Cadre? Estimating the Returns to Being a Local Official in Rural China," IZA Discussion Papers 6653, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp6653
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. All Politics Might Be Local, but the Returns to Local Politics Are Frugal
      by Marc F. Bellemare in Marc F. Bellemare on 2012-07-12 14:00:42

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    Cited by:

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    2. Markussen, Thomas & Ngo, Quang-Thanh, 2019. "Economic and non-economic returns to communist party membership in Vietnam," World Development, Elsevier, vol. 122(C), pages 370-384.
    3. Tingqiu Cao & Xianhang Qian, 2021. "Political Capital and Household Income: Evidence from Twenty-Four Transition Countries," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 151-165, March.
    4. Wang, Wen & Li, Qiang & Lien, Donald, 2016. "Human capital, political capital, and off-farm occupational choices in rural China," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 412-422.
    5. Markussen, Thomas & Ngo, Quang-Thanh, 2019. "Economic and non-economic returns to communist party membership in Vietnam," World Development, Elsevier, vol. 122(C), pages 370-384.
    6. Junying Lin & Zhonggen Zhang & Lingli Lv, 2019. "The Impact of Program Participation on Rural Household Income: Evidence from China’s Whole Village Poverty Alleviation Program," Sustainability, MDPI, vol. 11(6), pages 1-15, March.
    7. Deyou Chen & Lei Wang & Tao Su & Youtao Zhang, 2018. "Canonical Correlation Analysis Between Residents’ Living Standards and Community Management Service Levels in Rural Areas: An Empirical Analysis Based on Municipal Data in Anhui Province," Computational Economics, Springer;Society for Computational Economics, vol. 52(4), pages 1053-1068, December.
    8. Hao Wang & Jan Fidrmuc & Qi Luo & Mingzhong Luo, 2018. "What Stayers Do? Capital Endowments and On-Farm Transitions in Rural China," CESifo Working Paper Series 7306, CESifo.
    9. Markussen, Thomas & Ngo, Quang-Thanh, 2019. "Economic and non-economic returns to communist party membership in Vietnam," MPRA Paper 98384, University Library of Munich, Germany.
    10. Zhenhai Xiang & Pengfei Ban & Qifeng Yuan, 2020. "Measurement of the Income Difference of Rural Residents in Peri-Urbanized Areas and Its Influencing Factors: Evidence from Nanhai, Foshan, China," Sustainability, MDPI, Open Access Journal, vol. 12(20), pages 1-21, October.

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    More about this item

    Keywords

    village political economy; public sector labor markets; returns to political status; rural China;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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