Political Reform in China: Elections, Public Goods, and Income Distribution

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By Monica Martinez-Bravo, Gerard Padró i Miquel, Nancy Qian & Yang Yao

The control of large bureaucracies is a difficult task. State-level officials, for example, often lack the information they need for appropriate oversight of local officials. In autocratic countries, controlling local officials is further complicated by the weakness of established channels to receive feedback from citizens. To address this problem, several autocratic governments have introduced local elections in recent years.

China is a prominent example. The difficulties facing state officials who seek to control local (village) officials takes several forms. For instance, village officials are responsible for raising funds from villagers in order to provide local public goods such as schooling. But state bureaucrats cannot easily monitor village officials, who shrink from the substantial effort required to raise funds and run schools. Local officials can also exercise control over collectively owned means of production, such as land or village enterprises, to favor themselves and their cronies.

During the 1980s and 1990s, China introduced village level elections in response. Policymakers intended elections to resolve monitoring problems by giving local officials incentives to implement policies that appeal to a majority of their constituents in order to obtain re-election.

Our research provides a rigorous empirical analysis of how these elections changed the incentives for local officials. We construct the Village Democracy Survey (VDS), a panel of over two hundred nearly representative villages from 29 provinces for the years 1982–2005. The survey documents the history of economic policies and political reforms during this period. This is the longest and broadest panel ever constructed to describe Chinese villages and the first data set to systematically document the changes in the fiscal and political structure of village governments. We supplement the VDS with economic data from the National Fixed-Point Survey (NFS), which is collected yearly from the same villages as the VDS by the Ministry of Agriculture.

Read the Full Research Brief in Economic Policy

Monica Martinez-Bravo is an assistant professor at the Center for Monetary and Financial Studies; Gerard Padró i Miquel is a professor of economics at the London School of Economics; Nancy Qian is an associate professor of Economics at Yale University; Yang Yao is a professor at Peking University.

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