Working Paper: CEPR ID: DP7856
Authors: Albert Park; Sangui Wang
Abstract: We conduct the first systematic evaluation of the world?s largest community-based development program--China?s flagship poverty alleviation program began in 2001 which finances public investments in designated poor villages based on participatory village planning. We use matching methods and a panel household and village data set with national coverage to compare changes from 2001 to 2004 in designated poor villages that began plan investments and in designated poor villages that had yet to begin plan investments. We find that the program significantly increased both government- and village-financed investments. While the program did not increase the income or consumption of poorer households, it did increase the income and consumption of richer households by 6.1 to 9.2 percent. We also find suggestive evidence that governance matters in the distribution of program benefits. Relative gains were greater for richer households in villages with more educated leaders, and higher quality village committees delivered greater benefits to both richer and poorer households.
Keywords: China; Governance; Investment; Poverty
JEL Codes: H43; I32; O22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| China's Poor Village Investment Program (O18) | government and village-financed investments (H54) |
| government and village-financed investments (H54) | income and consumption for richer households (E21) |
| governance factors (education level of village leaders) (I25) | benefits for richer households (D14) |
| governance factors (education level of village leaders) (I25) | benefits for poorer households (H53) |
| China's Poor Village Investment Program (O18) | migration likelihood of richer households (R23) |