Political Reform in China

[Barun Mitra]

Political Reform in China: Elections, Public Goods, and Income Distribution
By Monica Martinez-Bravo, Gerard Padró i Miquel, Nancy Qian & Yang Yao

Cato Institute, Research Brief, July 9, 2014

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.

http://www.cato.org/publications/research-briefs-economic-policy/political-reform-china-elections-public-goods-income