Political Reform in China: Elections, Good Intentions, and Income Distribution

In response to the difficulty of monitoring bureaucrats at the local level, the Chinese government introduced village-level elections. Elected officials were incentivized to implement popular policies. As a result, local government expenditure on public goods like schooling and irrigation increased dramatically. Land was leased less and less to village enterprises and more and more to individual households. Income inequality was reduced, but this reflects more the deterioration of the rich than the elevation of the poor. In general, the results of this policy are consistent with the hypothesis that elections make village officials more responsive to the preferences of their constituents. Local officials are better controlled by elections than by bureaucratic monitoring.

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