Working Paper: CEPR ID: DP8975
Authors: Monica Martinez-Bravo; Gerard Padro; Nancy Qian; Yang Yao
Abstract: This study investigates the effects of introducing elections on public goods and redistribution in rural China. We collect a large and unique survey to document the history of political reforms and economic policies and exploit the staggered timing of the introduction of elections for causal identification. We find 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. We also find that elections cause significant income redistribution within villages. The results support the basic assumptions of recent theories of democratization (Acemoglu and Robinson, 2000; Lizzeri and Persico, 2004). In addition, we show that the main mechanism underlying the effect of elections is increased leader incentives.
Keywords: democracy; elections; institutions
JEL Codes: P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Introduction of elections (K16) | Public goods expenditure (H49) |
| Introduction of elections (K16) | Income redistribution (H23) |
| Public goods expenditure (H49) | Local tax revenue (H71) |
| Introduction of elections (K16) | Heightened accountability of village leaders (H83) |
| Heightened accountability of village leaders (H83) | Local tax revenue (H71) |
| Elections (K16) | Changes in land allocation and management of village enterprises (P31) |
| Changes in land allocation and management of village enterprises (P31) | Income redistribution (H23) |