Political Reform in China:

Elections, Public Goods and Income Distribution∗

Monica Martinez-Bravo†, Gerard Padró i Miquel‡, Nancy Qian§and Yang Yao¶

March 3, 2014

Abstract

We examine the effects of introducing village elections on public good expenditures,income distribution and land use in rural China. We construct a large panel data setby combining village administrative records with contemporaneously collected village-and household-level economic data and we use these data to document the history ofpolitical reforms and economic policies for over two hundred villages. We exploit thestaggered timing of the introduction of village elections to find that elections significantlyincreased public goods expenditure and reduced the amount of village land that thevillage government leases to enterprises, which is an indicator of corruption. Consistentwith a reduction in cronyism, we also find a reduction in the relative income of richhouseholds. These results suggest that local officials are better controlled by electionsrather than by bureaucratic monitoring.

Keywords: Institutions, Local Governance, Elections, Democracy; JEL: H4, H7,O1, P16

∗We are grateful to the editors, Larry Katz and Elhanan Helpman, and four anonymous referees fordetailed suggestions; Daron Acemoglu, Abhijit Banerjee, Doug Miller, Scott Rozelle and Lily Tsai for theirinsights; workshop participants at University of California at Berkeley, University of British Columbia, Cal-ifornia Institute of Technology, University of Chicago Booth GSB, Stockholm University (IIES), ColumbiaUniversity, Cornell University, Harvard University China Politics Workshop, New York University, North-western University Kellogg SOM, Princeton University Development/Labor Seminar, University of SouthernCalifornia, University of Toronto, Warwick University and the World Bank for their helpful comments. Wethank Yunnan Guo, Ting Han, Samuel Marden, Emily Nix, Yiqing Xu, and Linyi Zhang for excellent researchassistance. We thank the Chinese Ministry of Agriculture and their team of surveyors and field workers, andin particular, Wu Zhigang for his crucial role in our field work and data collection. We acknowledge financialsupport from Brown University PSTC, Stanford GSB Center for Global Business and the Economy, HarvardAcademy Scholars Research Grant, Yale University EGC Faculty Grant, the National Science FoundationGrant 0922087 and the European Union’s Seventh Framework Programme (FP/2007-2013) / ERC StartingGrant Agreement no. 283837.

†CEMFI, mmb@cemfi.es‡London School of Economics, NBER, CEPR, BREAD, g.padro@lse.ac.uk§Yale University, NBER, CEPR, BREAD, nancy.qian@yale.edu¶Peking University CCER, yyao@ccer.pku.edu.cn

1 Introduction

The control of large bureaucracies, as the extensive literature on bureaucratic corruption

shows, is a difficult task.1 Lack of information and appropriate oversight often results in the

misbehavior of local officials.2 In autocratic countries, the control of local officials is further

complicated by the weakness of established channels to receive feedback from citizens.3 To

address this agency problem, several autocratic governments have introduced local elections

in recent years.4

China is a prominent example. The agency problem between the state and local officials

at the village level can take several forms. For instance, village officials are responsible

for raising funds from villagers in order to provide local public goods such as schooling.

Difficulties in bureaucratic monitoring allow them to shirk from the substantial effort re-

quired by this activity. Lack of effective oversight also allows the local officials to use their

control over collectively owned means of production, such as land or village enterprises, to

favor themselves and their cronies. During the 1980s and 1990s, village-level elections were

introduced to mitigate these problems. Policymakers intended elections to resolve agency

problems by giving local officials incentives to implement policies that appeal to a majority

of their constituents in order to obtain re-election.

The goal of this paper is to provide rigorous empirical analysis of the effects of the

introduction of local elections on local public goods, land use and income, the results of

which can help shed light on the effectiveness of elections in changing incentives for local

officials.5 We motivate these outcomes later in the introduction.1An classic example in this literature is Wilson(1989).2For recent overviews of this literature see Banerjee et al.(2012) and Olken and Pande(2012).3Autocracies typically limit the rights to associate, freedom of expression and freedom of the press, which

in democratic countries are important for the transmission of information on local scandals and demands.For instance, Besley and Burgess (2002) show that a free press is important for government responsiveness.

4For example, local elections have occurred in Indonesia under Suharto (1968-1998), Brazil during themilitary dictatorship (1964-1985), and Mexico under the PRI (1929-2000). Recently, local elections werealso introduced in Vietnam in 1998, in Yemen in 2001, and in Saudi Arabia in 2005. For a literature reviewof the nascent political science research on elections in dictatorships see Gandhi and Lust-Okar (2009).

5The theoretical basis for these claims comes from the rich literature on political accountability. In broadterms, this literature examines how elections induce politicians to provide more common interest policies –more public goods, less rent-seeking– or to redistribute in favor of an electoral majority. Redistribution and

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Our study faces two notable difficulties. The first is the lack of detailed data on political

change and economic policies in rural China. To address this we construct the Village

Democracy Survey (VDS), a panel of over too 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, and contains detailed economic data on public

goods expenditure and financing. This is the longest and broadest panel ever constructed

to describe Chinese villages and is the first data that systematically document the changes

in the fiscal and political structure of village governments. We supplement the VDS with

economic data from the the National Fixed-Point Survey (NFS), which is collected yearly

from the same villages as the VDS by the Ministry of Agriculture.

The second difficulty lies in establishing the causal effect of the introduction of elections,

which were staggered in timing across villages. The first concern is reverse causality. Do

elections change economic conditions or do economic conditions generate demand for elec-

tions at the village level? The second concern is joint determination. Are the introduction

of elections and economic change jointly determined by a third factor such as broader re-

forms of rural policies? To address these concerns, we take advantage of two features of

the Chinese context. First, the timing of the introduction of elections is believed to have

been unrelated to village characteristics. Second, electoral reforms were supposed to have

been isolated to the village-level and did not affect higher levels of rural government. In the

paper, we provide a large body of anecdotal and quantitative evidence in support of these

two points.

The main empirical analysis proceeds in three steps. First, we document that the timing

of elections across villages within provinces is uncorrelated with a large number of observable

characteristics at the village level. This is consistent with the anecdotal evidence that the

timing of reforms was imposed top-down with little regard for village-specific characteristics.

common interest goods are therefore two complementary approaches to the majoritarian incentives inducedby elections. See the discussion in Persson and Tabellini, (2000, chapter 1). The recent theoretical literatureon democratization is also based on these majoritarian incentives. These theories predict that democracies,relative to autocracies, provide more public goods (e.g., Bueno de Mesquita et al., 2003)) and engage inmore redistribution (e.g., Acemoglu and Robinson, 2000).

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Second, we implement a difference-in-differences (DD) strategy to estimate the causal effects

of the introduction of elections: we compare outcomes before and after the first election in

each village, between villages that had already introduced elections and those that have not.

The baseline specification includes village fixed effects that control for all time-invariant

differences across villages, year fixed effects that control for all changes over time that are

similar across villages, as well as province-specific time trends to control for the economic and

cultural divergence across China during our period of study. As with any DD strategy, causal

interpretation relies on the assumption that in the absence of electoral reforms, the evolution

of outcomes would be “parallel” across villages regardless of when they implemented the first

election. Finally, we support our interpretation with a large number of robustness exercises.

For example, we show that there is no evidence of pre-trends and that our estimates are

robust to controlling for pre-election characteristics as well as the introduction of elections

at the province level, which is the main source of endogeneity.

The first main outcome of our analysis is village government expenditure on public goods.

In rural China, local public goods are mostly financed by village contributions, which local

officials need to exert substantial effort to collect. In the early post-reform (post 1978) era,

it was widely believed that officials shirked in this task, leading to severe under-provision

of local public goods. Our results show that the introduction of elections increased total

local government expenditure on public goods by 154,500 RMB (22,071 USD), which ap-

proximately 100% of the sample mean.6 This is driven exclusively by expenditures financed

by villagers. In contrast, public goods financed by the upper levels of government are un-

changed by elections, which supports our interpretation that the results are not confounded

by simultaneous changes at the upper levels of government.

The second outcome is land use. All village land is collectively owned and most of it

is allocated by the village leaders to households in long-term leases. The village leadership

can retain some land under its direct control and lease it to village enterprises. The profits

from this collectively held land are supposed to benefit all villagers equally, but the lack of6Throughout the paper, monetary values are measured in constant terms. We use the conversion rate of

1 RMB = 7 USD, which was the historical average for the period we study.

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transparency in managing land leases and enterprises provide local bureaucrats opportunities

for rent seeking.7 For this reason, villagers typically prefer land to be fully allocated to

households. We find that amongst villages that ever leased any land to enterprises, the

introduction of elections reduced the amount of land leased to enterprises by approximately

58 mu (3.8 hectares), which is approximately 50% of the sample mean.8 Amongst the

policies that village leaders are known to use to benefit elites, land use is the only one that

we observe directly.

The third outcome we examine is household income. If elections caused a systematic

reduction in the pro-elite bias in policy, then elections should reduce the income of rich

households relative to poorer ones. We find that the introduction of elections has little

effect on the income of the poorest half of households. However, the income of the 90th

percentile household is reduced by 5,056 RMB (722 USD), which is approximately 20% of

the sample mean. Consequently, the ratio between the income of the median household

and the 90th percentile household increased by 1.7 percentage-points. This reduction in

inequality is consistent with the existing elites’ position deteriorating with the introduction

of elections.9

The main results are consistent with the hypothesis that the introduction of elections

mitigates the agency problem at the village level: elected village officials provide more public

goods. They also allocate land to households and away from enterprises, which presumably

favors a majority of the villagers. Consistent with the new policies being less favorable to

the elite, elections reduce income for households at the top of the income distribution.

To shed light on the underlying mechanisms, we present several supplementary findings.

First, we find that the introduction of elections has a strong effect on public goods in villages

that experienced no leader turnover. This suggests that the introduction of re-election7See the Background section.81 mu = 1/15th hectare. Chinese households have very little farmland. Thus, our study uses the

indigenous measure.9Note that there are no positive effects for any income decile. It might well be that changes in land use

and other policies are inefficient, possibly because village and private enterprises were actually productive.Alternatively, it may be that the additional land that households receive increased their welfare in non-measurable ways, such as home production for own consumption, or that there are long-run gains thatcannot be measured with our data.

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incentives, which is the only change that took place in villages that retained incumbent

leaders, plays a role in the effect of elections. Next, we examine the policies used to achieve

the reduction in inequality that followed elections. This is especially interesting in the

rural Chinese context since the village government does not have the legal authority to

impose recurring taxes and transfers. One possibility would be that elected officials increased

fees and levies for richer households (for example, to finance the increase in public goods

provision). However, using a subsample of villages for which we have detailed household-

level data, we find no evidence of such progressivity. In contrast, we find that the changes

in total household income ratios are paralleled by changes in agricultural income and other

income sources easily affected by the village government through its control over village land

and enterprises. This suggests that the village government partly addressed its inability to

redistribute income through taxes by reallocating the productive assets and employment

opportunities that were under its control.

Our study adds to the growing body of evidence on the effects of elections on public goods

and inequality in rural China.10 We improve on existing work by systematically documenting

the history of electoral reforms and the political and economic structure of Chinese villages

in detail for a relatively long panel. The larger sample size and richness of our data allow

us to be more empirically rigorous than past studies and examine a broader set of outcomes

that can help shed light on the mechanisms underlying the effects of elections.11 This study

complements a companion paper, Martinez-Bravo et al. (2011), which provides a large body

of evidence that the introduction of elections is successful in making the village government

at least partially accountable to villagers, and more generally, adds to the nascent literature

on governance in autocracies and, in particular, in China.12

10Past studies have used either panel data of relatively few villages or a cross-section of many villages toprovide evidence on the effect of elections in rural China. For example, Shen and Yao (2008) examines theeffect of elections on inequality and infers redistribution from changes in inequality. Several studies haverelated elections to public goods (e.g., Zhang et al., 2004; Luo et al., 2007, 2010; Mu and Zhang, 2011).Also, Gan et al. (2006) examines the relationship between elections and villager health shocks.

11For example, earlier studies have not examined the sources of public goods financing, land allocation,the different sources of income or the contribution of re-election incentives.

12For example, studies such as Lorentzen (2010), Martinez-Bravo et al. (2011), and Persson and Zhu-ravskaya (2011).

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This study is closely related to within-country studies that have focused on various as-

pects of elections.13 Since elections are an essential element of democracy, these results

can also speak to the broader literature on democracy and economic policy.14 The existing

empirical evidence relating democratic transition to public goods and redistribution, which

mostly comes from cross-country studies, is inconclusive.15 Relative to cross-country com-

parisons, Chinese villages are much more comparable with each other and the introduction

of elections was not the result of social turmoil and other confounding factors. Our results

add to cross-country studies by showing that even a marginal move towards democratic

elections in the highly restricted setting of an authoritarian central regime can substantially

change village policy in public good provision and asset allocation. Our focus on elections

complements recent studies that emphasize the importance of constraints on the executive

in determining the effect of democracy on economic outcomes (e.g. Acemoglu and Robinson,

2001; Besley and Persson, 2011).16

This paper is organized as follows. Section 2 discusses the background. Section 3 presents

the conceptual framework and empirical strategy. Section 4 briefly describes the data.

Section 5 presents the main results, including the robustness checks. Section 6 presents

evidence on the importance of re-election incentives and Section 7 presents some additional13For example, Besley and Case (1995), Ferraz and Finan (2011) and Tyrefors and Pettersson-Lidbom

(2012) provide evidence for the role of several election characteristics in the United States, Brazil and Sweden,but they do not identify the effects of elections per se. Foster and Rosenzweig (2005) examines the effectof the introduction of rural elections on public goods provision in India, but focus on party competitionmechanisms. There is also a related literature examining the differences between elected and appointedjudges. For a recent example see Lim (2012).

14For instance see Acemoglu and Robinson(2001, 2006) or Boix(2003), both of which relate democratizationor extensions of the franchise to either increased public goods provision or redistribution. Husted andKenny(1997) and Miller(2008) provide empirical evidence for increased welfare spending in the context offranchise extension in the US.

15In the cross-section, democracy has been found to be positively associated with government size (Tavaresand Wacziarg, 2001), higher wages (Rodrik, 1999), lower inequality (e.g., Li et al., 1998), higher humancapital (Tavares and Wacziarg, 2001), and better health indicators (e.g.,Besley and Kudamatsu, 2006).However, in a large study looking at several socioeconomic policy dimensions, Gil et al. (2004) find thatdemocracy is associated with no difference in the outcomes they examine.

16Democracy is typically viewed as having two constituting elements: the presence of elections to determinewho will be the executive authority and the presence of institutionalized constraints, such as an independentjudiciary or media, on what the executive authority can do. The cited studies mainly focus on democracyas providing institutional constraints. In the Chinese context, such constraints are absent both before andafter the introduction of electoral reforms. Therefore our paper isolates the effect of democracy defined asthe presence of elections.

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results on local fees, sources of income, and household income evolution. Section 8 offers a

conclusion.

2 Background

2.1 Villages and Village Governance in Rural China

A majority of the rural population in China lives in villages, which comprise the lowest

level of government administration. Above the village government, there are the semi-

equivalent levels of county and township governments, the prefecture governments, the

province governments, and ultimately, the central government in Beijing. The main eco-

nomic activity in a village is agriculture and households farm plots of land that are assigned

to them in long-term leases. The average village comprises approximately 400 households.

Village governments were first organized by the communist government during the early

1950s, with two groups of leaders in each village. First, there is the village committee. It

typically consists of three to five members and is led by the village chairman, henceforth

VC. Second, there is the Chinese Communist Party branch in the village. It is similar in

size to the village committee and is led by the village Party Secretary, henceforth PS. Before

elections were introduced, all of these positions were filled by appointment by the county

government with input from the village Party branch. There was no clear distribution of

authority between the two bodies and anecdotal evidence suggests that the party branch

had more power.17

The village government is responsible for two important village-level policies that di-

rectly affect the well-being of its citizens. First, village governments are responsible for the

provision of local public goods such as irrigation and primary schools. They are supposed

to decide which public goods to provide and to raise funds from villagers to finance them.

Second, local officials are also responsible for the use and allocation of collectively owned17In an earlier version of the paper, Martinez-Bravo et al. (2012), we explore the relative powers of the

VC and PS by documenting the signatures of each leader on important village decisions. We documentthat there is a shift in power from the PS to the VS after elections are introduced such that the number ofvillages where most policies are decided unilaterally by the VC increases, and the number of villages wheremost policies are decided unilaterally by the PS decreases.

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means of production. The most important asset is arable land, all of which is publicly

owned in China. Most land is allocated to households for farming in long-term contracts.18

A fraction of land, no more than fifteen percent according to national law, may be retained

under the direct control of the village government so that it can make small adjustments to

household allocations without implementing a large-scale reallocation for the entire village.

During the 1980s and 1990s the land retained by the village government was often leased to

highly profitable village enterprises.19

Village governments do not have legal authority to impose any regular or recurring

taxes. Instead, to fund the activities of the village government, including local officials’

salaries, they can use proceeds from collectively owned sources of income such as village

enterprises or leasing land to enterprises (that can be from inside or outside the village), or

raise revenues by imposing ad hoc fees and levies, which we will henceforth refer to as local

fees for simplicity.

The obscurity of village enterprise and village government accounts typically means that

upper-level bureaucrats encounter enormous difficulties monitoring the activities of local

officials. As a consequence of this informational advantage, local officials who shirked in

providing public goods or who engaged in rent-seeking were able to maintain their positions.

There is an abundance of examples of corrupt village officials who neglected public good

provision and systematically extracted personal rents from land and enterprises controlled by

the village governments (e.g. Brandt and Turner, 2007, Kennedy et al., 2004, Oi and Rozelle,

2000, Rozelle, 1994; and Rozelle and Li, 1998). In response, villagers often resist paying local

fees, which in turn, starves local governments of funds and limits its ability to provide public

goods (e.g., Oi and Rozelle, 2000; Rozelle, 1994; Whiting, 1996). This negative feedback loop

further complicated the monitoring problem of the upper-level bureaucrats since they could

not distinguish whether low levels of public goods provision were an outcome of corruption,18Rural households cannot sell their land rights in China, and during the period of our study were also

prohibited from renting out their land. In most cases rural households were also restricted from hiringlaborers because households that did not farm their own land would lose land rights. See Jacoby et al.(2002) for a related study about tenure security in rural China.

19Additional responsibilities are the maintenance of law and order, the collection of grain taxes on behalfof the central government and the implementation of centrally mandated policies.

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lack of effort by the local officials, the refusal of villagers to provide the necessary funds, or

the lack of demand from villagers.

2.2 Electoral Reforms

Motivation The first local elections were introduced in the early 1980s as collectives

were being dismantled. The difficulties in controlling local officials were paramount in the

discussions leading to the introduction of elections, as shown by this quote from the official

debate.

“Who supervises rural cadres? Can we supervise them? No, not even if we had

48 hours a day....” – Peng Zhen, vice-chairman of the NPC Standing Committee,

said at the chairmanship meeting of the Standing Committee of the Sixth NPC,

April 6, 1987 (O’Brien and Li, 1999).

Election proponents argued that village elections could fix the agency problems that were

plaguing local administration and generating discontent towards the regime at large. More

specifically, elections were expected to reduce the need for the central government to monitor

local officials by shifting monitoring responsibilities onto villagers. The idea was that making

local officials accountable to villagers would impose checks on the VC’s behavior and would

also allow villagers to select the most competent candidates.20

The Reform The initial introduction of elections changed the positions of all village

committee members from being appointed by the party-led county-level government to being

elected by villagers. The main legal requirements were that: i) the number of candidates

must exceed the number of positions; ii) term lengths were to be three years; and iii)

the winner must obtain 50% of votes in the last round of voting.21 The village committee

member who obtained the highest number of votes in the last round automatically became

the VC. All adult villagers had the right to vote and could abstain from voting. The village

Party Branch was unaffected by the reforms and remained appointed by the upper-levels20See Kelliher (1997) and O’Brien (1994, 1999) for descriptions of the policy debates that led to the official

introduction of local elections.21Elections with multiple candidates could thus undergo many rounds of voting.

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of government. There was no change either to the size of the village committee or party

branch (e.g., the number of positions).

The law did not clarify the power relationship between the village committee and the

Party Branch, which remained ambiguous.22 Anecdotal evidence suggests that the power

arrangements between these two bodies were very heterogeneous across villages. Indeed, in

many areas the Party maintained control over villages by allowing the local Party branch to

nominate the candidates. For this reason, we refer to village leaders, which comprise both

bodies, as the subject of village decision-making. Rather than wholesale democratization,

this reform is thus better understood as a marginal change that made the local government

more accountable to villagers. Ultimately, the main change of the reform was to give villagers

the power to vote unsatisfactory VCs out of office.

In these elections there are no political parties and no slates of candidates with common

platforms. Candidates are drawn from the village and are thus typically well-known by

the villagers. As a consequence, candidates typically run on well-understood issues and are

probably selected for qualities that have been long observed by their fellow villagers.23

Timing Innovative provincial governments began experimenting with elections in the early

1980s. Elections were formally codified by the central government in the Organizational Law

on Village Committees (OLVC) in 1987. From this point onwards, all provinces were pushed

to introduce elections in all rural areas. A revision of the OLVC in 1998 required candidate

nominations to be open to all villagers.

The decision to introduce elections at the province-level was the result of political pres-

sure and bargaining between the central government and the provincial leaders. However,

implementation within provinces was mainly imposed top-down by bureaucratic fiat. Each

level of government would pilot the reform in a few select villages, and the reform would be

widely implemented once the procedures and logistics were tested (O’Brien and Li, 1999).22As Kelliher (1997) discusses, according to the law, the village committee operates under the leadership

(lingdao) of the Party.23There are very few accounts of actual electoral campaigning. In many cases, elections were set up with

only a few days’ notice (Unger, 2002: p. 221).

10

Anecdotal evidence from interviews that the authors conducted with county- and province-

level officials suggests that the pattern of the roll-out was mostly orthogonal to village char-

acteristics. This is consistent with the speed of roll-out within provinces. By all accounts,

villages had no discretion over the timing of introduction of elections, which is characteristic

of reforms in rural China.24

The interviews that the authors conducted with village-, county- and province-level

officials as well as the evidence from qualitative studies only point to two exceptions to

the quasi-random timing of the within province introduction of village elections. First, the

model villages that piloted the reform obviously received elections earlier. Second, there

are a few accounts of elections being delayed in “problematic” villages that had a history

of non-compliance with unpopular central government policies (e.g., One Child Policy or

the permanent expropriation of village land by the upper-levels of government) or had a

large kinship clan that could dominate other villagers in a majoritarian regime (e.g., Han

and O’Brien, 2009; Oi and Rozelle, 2000). To examine the quantitative importance of these

factors for determining the timing of elections, we collected data on the allowance of One

Child Policy exemptions and the incidence of upper-government land expropriations in the

VDS. Later, we will examine the correlation between these variables and the introduction

of elections. Afterwards, in the robustness section, we control for them explicitly to check

that they do not confound our main results. Finally, we also check that our estimates are

not driven by pilot or straggler villages in each province.24In his detailed study of elections, Sinologist Unger (2002, p. 222) writes that “These [elections] should

not be interpreted as bottom-up initiatives by the villagers themselves; they are not in a position to playany precedent-setting part in the initiation of new electoral reforms. There is a mistaken belief amongsome people outside China regarding this... elections are quietly being instituted at levels above the village,engineered first in selected districts at a distance from Beijing, through the connivance of the [central]Ministry of Civil Affairs and middle-ranking officials out in the regions”. Unger (2002) also notes the generalpassivity of villages in implementing rural reforms such as land reforms and the adoption of the HouseholdResponsibility Reform earlier in the reform era.

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3 Conceptual Framework

3.1 Accountability

The anecdotal evidence described above suggests that prior to the introduction of elec-

tions, local officials could benefit from the agency problem in two distinct ways. First, they

could shirk in their efforts to provide and maintain public goods. Second, they could engage

in rent seeking and pursue policies that benefitted them and other village elites. Elections

were introduced in order to mitigate these concerns. Hence, if the reforms were effective

in making local officials accountable to villagers to some extent, we would expect the in-

troduction of elections to affect several outcomes. Public goods provision should increase

since re-election concerns give village officials incentives to exert the necessary effort. Due

to this increase in accountability villagers should also be willing to contribute more funds

to the government, further improving the provision of public goods. Land use and other

policies should change in favor of the majority preferences in the village, which would result

in changes in income distribution.25 The purpose of the rest of this paper is to document

the effect of the introduction of elections on these outcomes.

3.2 Empirical Strategy

The empirical strategy used in our main analysis assumes that the introduction of elec-

tions was quasi-random once province-specific time trends and village and year fixed effects

are included. Specifically, we use a differences-in-differences (DD) strategy, where we com-

pare the evolution of outcomes of villages that have had their first election to villages that

have not yet implemented their first election. Our baseline estimates control for village and

year fixed effects. Village fixed effects control for all time-invariant or slow-moving differences

between villages, such as geographic characteristics (e.g., hilliness or distance from a city)

or culture. Year fixed effects control for changes over time that affect all villages similarly

(e.g., national policy changes, macroeconomic growth). In addition, we add province-time

trends, which control for the widening differences across regions brought about by unequal25The effects of an increase in leader accountability on village policies are formalized in a companion

paper, Martinez-Bravo et al. (2011).

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economic growth during the long time horizon of our study.26 Since we believe that the tim-

ing of elections is endogenously determined at the province level, but quasi-random within

provinces, these trends have the additional advantage of capturing a significant amount of

the cross-province variation. The baseline specification also controls for the second wave of

reforms that opened the nomination of candidates to villagers. This allows us to control for

potential heterogeneity in the effect of elections.27 The baseline equation that characterizes

the effect of elections is

Yvpt = βEvpt +λOvpt + γpt +δv +ρt + εvpt , (1)

where the policy outcome of village v in province p during calendar year t, Yvpt , is a function

of: a dummy variable, Evpt , that takes the value of one after the first election in village v

has taken place; a dummy variable, Ovpt , that takes the value of one after the first open

nomination in village v has taken place; province-year trends, γpt; village fixed effects, δv;

and calendar-year fixed effects, ρt . Since the timing of elections was largely decided at the

province level, we cluster the standard errors at the province-level. As we only have 29

provinces, we address the possibility of small sample bias in the clustered standard errors

by also presenting p-values derived from wild bootstraps as recommended by Cameron et

al. (2008).28 The main coefficient of interest is β . It is statistically different from zero if

elections affect a particular policy outcome.

Interpreting β as the causal effect of introducing elections does not require us to assume

that election timing within provinces was random. Instead, it requires the weaker assumption

that conditional on the baseline controls, the introduction of elections is not correlated with

time-varying village characteristics that affect the outcomes of interest through channels26In the robustness section we show that the magnitude of our estimates are similar when we control for

province-year fixed effects (although the estimates are less precise than when we control for province trends).27This improves the precision of our estimates, but does not affect the magnitude of estimated effects of

the introduction of elections. For brevity, we only report results where we control for the introduction ofopen nominations. Results without these controls are available upon request. Note that we do not controlfor other procedural differences in elections because they are much more likely to be endogenous.

28The bootstraps are estimated using 500-999 repetitions.

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other than elections. We do not take this identification assumption as given and provide a

large body of evidence supporting its validity later in the paper. In particular, before we

present the main results, we present evidence that the timing of elections within provinces

was uncorrelated with a large number of village-level characteristics. Then, after we present

the main results, we show that there is no evidence of pre-trends and conduct a large number

of additional robustness and sensitivity checks. In particular, we show that our estimates

are similar when we control for the timing of the first introduction of village elections in

each province, which is the main source of endogeneity.

4 Data

4.1 The VDS and NFS Surveys

The primary data used in this paper for elections and public goods expenditure are from

the The Village Democracy Survey (VDS), a unique retrospective village-level survey con-

ducted by the authors of this paper. The first wave, conducted in 2006, records the history

of electoral reforms, de facto leader power, public goods expenditures, and the enforcement

of central government policies. The second wave, conducted in 2011, records the names and

characteristics of all village leaders since 1982. To ensure accuracy of the historical data,

the retrospective VDS relies on administrative records for each village when possible. When

village records are not available we relied on the recall of survey respondents, which include

all current and former living village leaders and elders (e.g., teachers) in each village. This

applies to very few of our variables and we will note it when they are relevant. The VDS

forms a balanced panel of 217 villages for the years 1982-2005. The villages we survey are

the same villages surveyed by the National Fixed-Point Survey (NFS), which we discuss

next.

Our measures of income and land are reported by the NFS, a detailed village- and

household-level economic survey collected and maintained by a research center of the Min-

istry of Agriculture of China. It is collected each year beginning in 1986, with the exception

of 1992 and 1994 due to administrative issues. The NFS villages were chosen in 1986 to

14

be nationally representative for rural China. Within each village, approximately 25% of

households were randomly selected in 1986 and followed over time; new households were

introduced over time to maintain representativeness.29 From the NFS, we were able to ob-

tain village-level data for variables such as the amount of village land that is dedicated to

farming and the amount of village land that is leased out to enterprises. These variables

will be used in several supplementary exercises examining public goods. We also obtained

the total income of households at the 10th, 25th, 50th, 75th and 90th percentiles of the

within-village-year total income distribution.30 For a subset of villages in ten provinces, we

were also able to obtain more detailed household-level data. Because this subsample is small

and non-representative, we only use it to supplement the main analysis. This subsample is

discussed further in Section 7.

The main analysis uses the VDS panel data with the addition of the variables for land and

income percentiles discussed above from the NFS. The main sample comprises a balanced

panel of 217 villages from 29 provinces.31

Our data have several advantages. First, to the best of our knowledge, the VDS data are

the most comprehensive data on village-level reforms ever constructed. They cover a period

of time starting in the early 1980s. In addition to recording the history of electoral reforms,

we also record the timing of other major rural reforms, the occurrence of village mergers, and

numerous other village-level characteristics. This allows us to control for heterogeneity across

villages more comprehensively than past studies, which is particularly important given the

natural diversity across China. The richness of the data also allows us to provide a detailed

analysis of the effect of elections on a range of policies and to assess the mechanisms driving

the reduced-form effects. Second, the NFS economic data and the village administrative29According to the Ministry of Agriculture, there is very little attrition and households and villages are

mainly added to adjust for gradual demographic changes.30We are grateful to Wu Zhigang for computing these statistics for us for each village-year.31There are 31 provinces in China at the end of our sample period. The two excluded provinces are

Tibet and Chongqing. Tibet is excluded because it is subject to different political and economic policies.Chongqing is a city-municipality that is excluded because it did not achieve provincial status until 1997.The three other city-municipalities with provincial status (Beijing, Shanghai and Tianjin) are included inour data. Each contain a substantial rural population (30% or higher). We will control for whether a villageis a suburb of a city later in the section on robustness and show that our results are not influenced by theirinclusion.

15

records that we surveyed in the VDS were collected contemporaneously. Hence, we avoid

recall bias. Third, the panel structure of the survey allows us to control for village fixed

effects and province-year trends. Finally, the fact that the NFS samples a large number

of households in each village means that we are able to examine the effects of elections on

income distribution within villages.

The main drawback is that the variables included in the NFS change over time to meet

the needs of the Ministry of Agriculture. Thus, we have a small number of observations

for many interesting variables (e.g., school enrollment) and cannot examine them in the

regression analysis.32 All observations in the empirical analysis are at the village-year level.

We will describe additional variables as they become relevant.

4.2 Descriptive Statistics

Several pieces of descriptive evidence are consistent with the anecdotal evidence on the

timing of electoral reforms discussed in Section 2. First, the data show that there is sub-

stantial within province variation in the timing of the first election in each village. In

a village-level cross-sectional regression, when we regress the year of the first election on

province fixed effects we find that the R-squared is 0.33. Thus, approximately 67% of the

variation in the timing of elections is within province. This is important for our strategy,

which largely relies on this variation.

Second, the timing of the rollout is consistent with rapid top-down implementation within

provinces and counties. Our data indicate that 16% of villages held their first elections

prior to the official introduction of elections by the county government, 66% held their first

elections the year that the county introduced elections, and 18% held their first election

afterwards.33 Table 1 shows that the average village implemented its first election within

the same year as the official introduction of elections in its county and five years after the first32There are many other interesting variables that are inconsistently collected and therefore not used in

our analysis (e.g., obligated working days, roads). Another drawback of the NFS is that it did not collectdetailed demographic data.

33Note that the timing of the official introduction of elections in each county is based on respondent recall.To maximize accuracy, our surveyors only record a date if all respondents surveyed in a given village agree.If there is no consensus, this variable is recorded as missing. Since provinces are large and respondents couldnot confidently recall the year of the first election within a province, the date of province-level introductionis inferred as the year of the first election in each province according to our survey.

16

election in the same province. Since the 29 provinces of our sample include approximately

2,885 counties and 623,669 rural villages (as defined by the number of village governments,

cunming weiyuanhui), these statistics imply that the average county was able to introduce

elections in 143 villages within one year.

Third, the fact that a small number of villages implemented elections before and after

the official introduction in each county is consistent with the anecdotal evidence that each

administrative division typically piloted the reform before officially introducing it and also

delayed elections in a few villages. Hence, given our identification assumption, it is important

to check that our baseline estimates are not driven by the early movers or the stragglers.

In addition, we can provide direct evidence that the timing of the first election is un-

correlated to most pre-reform village characteristics. We examine the pair-wise correlation

between election timing and a large number of village characteristics such village size, prox-

imity to an urban area, proxies for social and economic structure, measures of the pre-existing

level of public goods provision and other outcomes of interest. We measure all these village

characteristics in the first year that data are available.34 The sample for this estimation is

therefore one cross section of villages. We regress the year of the introduction of elections

on each village characteristic. Since we are interested in within-province variation, we con-

trol for province fixed effects. For brevity, we present the results for village demographic

and physical characteristics, the main outcome variables of our regression analysis, and the

unpopular upper government policies that we discussed in Section 2.35 Since it is difficult

to compare magnitudes across different regressors, Table 2 presents the standardized coef-

ficients for each regression. Only one of the correlates is statistically significant. Given the

large number of correlates that we examine (we examine over eighty additional insignificant

correlates that are not presented in the paper), the significance of one correlate is not nec-34Most variables reported by the NFS are available first in 1986. Land variables are available starting

in 1987. Measures of the One Child Policy and upper-government land expropriation from the VDS areavailable starting in 1982. The results are similar if we measure the latter two variables in 1986. The resultsare also similar if we measure all variables as the average of the first two years for which they are available.These alternative results are available upon request.

35See the Online Data Appendix for a description of the variables for upper-government land expropriationand One Child Policy exemptions, which we collect in the VDS.

17

essarily meaningful. Nevertheless, in the robustness exercises later in the paper, we will

control for this and other potentially confounding variables.

The data also provide several pieces of descriptive evidence that suggest that elections

were effectively implemented. We find that 79% of elections had more candidates than

positions, as the law required. Most of the elections with too few candidates were the

first elections in their villages, and were all immediately followed by fresh elections in the

subsequent year. This is consistent with the view that opponents to the electoral reform

were unable to fully derail the introduction of elections, and with qualitative accounts of

dissatisfied villagers demanding and obtaining recalls (O’Brien and Li, 2006). Table 1 shows

that, as legally required, elections occur every three years on average.36 Interestingly, there

was a 38% VC turnover rate for the first election, which is more than twice as high as the

average turnover rate in the sample (17%).

5 Main Results

5.1 Public Goods

We first examine public goods expenditure at the village level, which villages record as the

sum of expenditures on seven categories that are defined by the Ministry of Agriculture: ir-

rigation, primary schools, sanitation, within-village roads, electricity, the environment (e.g.,

planting trees), and “other”.37 These village administrative records are recorded in the VDS

and are available for all years and villages during 1986-2005. Table 3 presents the effect of

elections on public expenditures from estimating equation (1). Our data allow us to sepa-

rately examine expenditures according to the source of the funds, which we categorize into

funds from villagers and non-village sources.36Note that there is variation in this variable (the standard deviation is approximately one year), which

mitigates the concern that village records report elections as they are supposed to occur and rather thanwhen they actually occur.

37The villages in our sample began recording public goods expenditures in 1986 at the request of theMinistry of Agriculture. The accounting methods, the categories for public goods, and the sources of fi-nancing are all determined by the ministry. In addition to public goods expenditures, village governmentexpenditures also cover other items such as salaries of local cadres and expenditure on festivals and celebra-tions. In our data, public goods expenditures account for approximately 27% of total village governmentexpenditures.

18

Panel A of Table 3 lists the average amount for each type of expenditure and Panel

B presents the regression estimates. Note that for all estimates we report standard errors

that are clustered at the province level in parentheses and wild bootstrapped p-values in

square brackets immediately below. Column (1) shows that elections increase total public

good expenditures from all sources by approximately 154,500 RMB (22,071 USD), where

the sample mean expenditure is 142,800 RMB (20,400 USD). The estimate is significant

at the 5% level. The result is consistent with our hypothesis that elections changed the

incentives of village leaders and led them to exert more effort and be more responsive to

villagers’ demands for more public goods. The large magnitude of the increase is probably

a consequence of pent-up demand, since there was extreme low provision of public goods

prior to the elections (e.g., Luo et al., 2007; Luo et al., 2010).

To further support this interpretation, we analyze expenditure by source of funding in

columns (2)-(3) of Panel B. The top row shows that, consistent with the anecdotal literature,

village leaders are responsible for raising most of the funds required for village public goods

–approximately 70% of total funding for village public goods comes from village sources.

The regression results show that the aggregate increase in public goods expenditure found

in column (1) is entirely driven by an increase in funding from villagers. The estimate for

village financing in column (2) is similar in magnitude to the estimate for total financing and

statistically significant at the 5% level. In contrast, the estimate for non-village financing in

column (3) is near zero in magnitude and statistically insignificant. This result is important

for three reasons. First, it demonstrates that elections affect policy at the village level,

since the responsive funds are under the control of village leaders. Second, it contradicts

the notion that democratically elected leaders cannot raise revenues for public goods in our

context.38 Third, it contradicts the alternative interpretation that the estimated effects of

the introduction of elections are driven by an increased willingness of the upper-government

to fund local public goods, since direct transfers are the most immediate policy tool that

upper levels of governments would use to affect local public good provision.38For example, see the classic work of Huntington (1968) for a discussion of why democracy hinders the

government’s ability to raise taxes.

19

In addition to the results presented here, in the Online Appendix we also provide sug-

gestive evidence that the increase in public goods was likely to correspond to demands from

villagers.

5.2 Land Use and Household Income

Recall from Section 2 that village leaders are responsible for the allocation of village

land to households, and that some land is often leased out to village enterprises. Villagers

typically dislike this practice, because they suspect it is a source of rents for the village

leadership and its cronies, and they would rather have direct control over more land.39

Data for the use of village land is reported by the NFS for all villages for the years

1987-2005 (excluding 1992 and 1994). The villages in our sample dedicate approximately

96% of arable land (approximately 51% of total village land) to households for farming.

Approximately 75% of the remaining arable land is leased out to “enterprises”, a term which

we use for firms run by collectives or villagers (see Table 1). Since elections can only reduce

the amount of land leased out to firms if such land existed prior to the first election, we

restrict our analysis to villages that ever used any arable land for non-household farming

prior to the first election. This reduces the sample to 108 villages from 28 provinces.40

The estimates are displayed in column (1) of Table 4, where we use the same specification

as in equation (1). It shows that the introduction of elections reduced the amount of land

that is leased out to enterprises by approximately 57.7 mu (3.85 hectares), where the sample

average is approximately 108.5 mu (7.23 hectares). The estimate is statistically significant

at the 10% level.

Since the village leadership and other village elites likely captured most of the rents from

running village enterprises, reducing the amount of land allocated to enterprises and giving

it back to village households is a change that reduces pro-elite bias in village policies. Land

allocation to enterprises is just a particular example of the many levers the village leadership39Consistent with this view, in a cross-sectional study Brandt and Turner (2007) find that redistributing

collective land to villagers is positively correlated with re-election probabilities. We present evidence inSection 7 that income from enterprises is not shared equitably across households.

40Our results are similar if we alternatively restrict the sample to villages that ever leased any land toenterprises during any time in the sample.

20

can use to affect rent allocation across households.41 If elections cause a reduction in the

pro-elite bias of these policies, they should result in income losses for elite households. To

examine this possibility, we look at the effect of elections on household income at several

percentiles of the village distribution.

We have data on total household income for households on the 10th, 25th, 50th, 75th

and 90th percentiles of the within village and year income distribution for the full sample

of villages for 1986-2005 (excluding 1992 and 1994).42 In the top row of Table 4, we present

descriptive statistics on the distribution of household income to illustrate the extent of in-

come inequality in villages. In our sample, the richest households (90th percentile) typically

earn twice as much as the median household (50th percentile), who again earns about twice

as much as the 10th percentile. Hence, despite the fact that de-collectivization is recent,

there is already substantial inequality within villages. This can be the result of cronyism if

the richest households are benefitting from their connections to the village leadership. At

the same time, it could also be a consequence of some households being entrepreneurial and

successful and thereby experiencing more rapid income growth during the early reform era

than less productive households. These two causes of inequality are not mutually exclusive.

To examine the effect of the introduction of elections on income distribution, we estimate

the baseline equation (1) with household income at each percentile as the dependent variable.

Columns (2)-(6) of Table 4 show that elections do not statistically change incomes for

most households, but significantly reduce incomes for the 90th percentile households by

5,056 RMB (722 USD), where the sample mean is approximately 24,476 MRB (3497 USD).

This reduction represents approximately 20% of the sample mean. We also note that the

coefficients become progressively more negative for higher income deciles.

In column (7), we examine the ratio of the median household income to the 90th per-

centile household. The estimates show that elections increased the income of the median41For instance, the leadership is responsible for choosing who obtains a salaried job in the village gov-

ernment or in village enterprises, and as we discussed earlier, it also decides household land allocation. InSection 7, we examine other channels using a subsample of villages for which we have richer household data.

42For example, the income of the 10th percentile household refers to the income of the household that ison the 10th percentile of the income distribution within a village during a given year. These were computedby the Ministry of Agriculture from the NFS household level data.

21

household relative to the 90th percentile household by 1.7 percentage points. The estimate

is statistically significant at the 5% level. Relative to the mean income ratio of 0.53, this

increase is moderate in magnitude.

These results suggest that upon the introduction of elections, the village leadership

changed economic policies such as land distribution and the management of village en-

terprises in such a way that the former economic elites were less favored. The welfare

implications of this reduction in inequality are unclear and partly depend on the origins of

pre-reform inequality. Note that we do not observe a significant increase in income at any

level of the income distribution, so it might well be that these changes introduced economic

inefficiencies. We discuss this further in the conclusion. In any case, the relative drops of

income only affect the richest households, which is consistent with the interpretation that

they are a result of policy changes designed to please the majority of villagers.

5.3 Robustness

There are three main concerns for our empirical strategy. The first concern is that despite

controlling for province time trends, our baseline results are partly driven by cross-province

variation in timing, which is determined by provincial leaders for potentially endogenous

reasons. We address this issue in three ways. First, to control for the province-level timing

of the decision to introduce village elections we add a dummy that indicates whether any

village in a given province has introduced elections. The estimates of this robustness check

on our key outcomes are shown in Table 5 column (2). They are similar to the baseline

estimates displayed in column (1) for ease of comparison. Hence, our results are not an

outcome of province-level variation in the timing of the introduction of the reform, which is

the main source of endogeneity concerns.

A second way of accounting for province-level factors is to introduce province-year fixed

effects instead of province-year trends. This allows the influence of province characteristics

to vary flexibly over time. Column (3) shows that the coefficients are similar to the baseline,

although the estimates are less precise.

Finally, we control for province-level variables such as per capita GDP, per capita agri-

22

cultural GDP, and per capita government expenditure in public goods.43 The estimates

with these controls, which do not differ from our baseline, are shown in column (4).

The second main concern is that our estimates could be driven pilot or straggler villages

in the reform implementation (see Section 2), which may have been chosen endogenously. In

column (5), we repeat our estimates on a restricted sample where we drop pilot and straggler

villages.44 The estimates are nearly identical to the baseline.

The remaining concern is that there may be village-specific and time-varying determi-

nants of the introduction of elections that are not controlled for by the baseline controls and

that affect the outcomes of interest through channels other than elections. In addition to the

correlational evidence presented earlier in Table 2, we provide several pieces of additional

evidence against the possibility of endogenous timing.

First, we provide evidence for the parallel trends assumption. For our DD estimate to

be consistent, in the absence of elections, the outcomes of villages that introduced elections

earlier should have evolved along parallel trends with villages that introduced elections

later. Since it is impossible to observe the counterfactual trend, we follow the literature in

conducting a pre-trend analysis in the main outcomes of interest. The presence of a trend

in the years leading up to the introduction of elections would be a sign that there was a

different evolution in villages that were about to implement elections.

To investigate the presence of pre-trends, we estimate the coefficients of the dummy

variables of each year since the first election (i.e. dummies for one year before the first

election, two years before, etc.). We can simultaneously estimate these election-year dum-

mies together with the year fixed effects because the timing of elections is staggered. To

avoid compositional effects in estimating these election year dummy variables, we restrict

the sample to villages that are observed for the same number of years before and after the

election – i.e., we form a panel of villages that is balanced in election years. If there are43These data are reported by China Statistical Yearbooks.44A pilot village is defined as a village that implemented elections more than two standard deviations before

the average timing of villages in the same province. A straggler village is defined as one that implementedelections more than two standard deviations after the average timing of villages in the same province. If allof the villages in a province implement elections in the same year, then that province will have no pilot orstraggler villages.

23

no pre-trends, then the estimated dummies for the years prior to the first election should

be close to zero. Moreover, if the main results reflect changes that begin when elections

are introduced, the estimated dummies should begin to differ starting the first year of the

election.

The coefficients and the standard errors for the estimated effects of the number of years

since the first election are presented in Online Appendix Table A.4. The coefficients are

plotted in Figure 1. For visual reference, we plot the value of zero for the reference years.

To minimize noise, our reference group, indicated as -4 on the x-axis, actually comprises

of -5 and -4 years since the first election.45 The year when the first election takes place

is indicated as election-year 0 on the x-axis. There is no evidence of pre-trends for any of

the three outcomes, which is consistent with the parallel trends assumption. Moreover, the

trend breaks in the coefficients at year zero show that the effect of elections begin the year

of the first election, which is consistent with the interpretation that the main DD estimates

capture the influence of the electoral reforms rather than spurious trends.46

One may still be concerned that election timing is correlated with pre-conditions that af-

fect our outcomes of interest through channels other than elections. We address this concern

by directly controlling for the interaction terms of the characteristic that was significantly

correlated with the timing of the introduction of elections – the occurrence of upper govern-

ment land expropriation (see Table 2) – and the full vector of year fixed effects. Given the

anecdotal evidence on the delay of elections for villages with a history of non-compliance to

unpopular central government policies, we also control for the interaction of whether there

were exemptions to the One Child Policy and year fixed effects. These characteristics are45The main constraint to how many pre-reform years we can observe is data availability. Online Appendix

Table A.1 shows that extending the balanced panel to include more pre-election years would cause us to losetoo many observations.

46We also investigate the presence of pre-trends by regressing each of the three main outcomes againstall the explanatory variables in the baseline plus a linear trend in the years since the first election andits interaction with the post-election dummy variable. This estimates a years-since-the-first-election trend,where the trend is allowed to differ between the pre- and post-reform periods. The main advantage of thismethod is that we can use the full sample of villages. Since we do not dummy out each year since the firstelection and most villages are observed for at least one year during the pre- and post-first-election periods,this method is much less likely to be confounded by composition effects. The coefficient for the uninteractedtrend variable (the pre-trend) is always small in magnitude and statistically insignificant. We conclude thereis no pre-trend. These results are available upon request.

24

measured in the first year that data are available (1982). The interaction with year fixed

effects controls for the influence of these variables over time in a fully flexible manner, and

to some extent, it also controls for the influences of all of its correlates over time. Column

(6) of Table 5 shows that the coefficients with these additional controls are very similar to

our main estimates.

We consider the possibility that several other village-level factors could potentially con-

found the effect of elections on our outcomes of interest. These factors include whether a

village is a suburb of a city (a dummy variable interacted with year fixed effects), whether

the Tax and Fee Reform had been implemented, and the level of village social capital (in-

teracted with year fixed effects). To proxy for the latter we follow Tsai’s (2007) work in

using the presence of a lineage group (i.e., an ancestral hall, family tree) , village temple, or

a large kinship group to proxy for social capital.47 To maximize the statistical precision of

our estimates, we use the principal component of these three measures as our social capital

proxy. Column (7) shows that the resulting coefficients are similar to the baseline. In column

(8), we re-estimate the baseline on a sample restricted to villages that never experienced an

administrative merger with another village since 1982. The coefficients are also similar to

the baseline.

A final remaining concern is that the timing of electoral reforms could have coincided

with the timing of changes in the Communist Party. Since we interpret our results as

the consequence of increased accountability of the newly elected leader in the village, such

simultaneous change would be a confounding factor. To address this possibility, we conduct a

placebo test comparing VCs, who were affected by the electoral reform and Party Secretaries

(PS), who were not supposed to be affected. In particular, the PS continued to be appointed

by upper-level authorities after elections were introduced in the villages. If there is no

change in the Communist Party, then PS turnover and characteristics should not change

with the introduction of elections. Table 6 Panel B shows the estimates from regressing PS

turnover rate, age and years of educational attainment on the baseline explanatory variables.47To measure the size of the kinship groups, the VDS recorded names from the village roster.

25

Elections have no effect on any of these outcomes. In contrast, Panel A shows that elections

increased turnover rate, reduced age, and increased the years of educational attainment for

the VC. The results of the placebo test support our interpretation and are consistent with

the anecdotal literature which emphasizes that the introduction of village elections was not

accompanied by other changes at higher levels of government.

In addition to the robustness tests presented in the paper, we conduct many others that

are not presented here for brevity.48 For example, we address the fact that several villages

introduced elections prior to when our outcome data begin. To check that our estimates are

not driven by villages for which there is no variation in elections, we re-estimate the effect

of elections on each outcome where each regression is restricted to a sample of villages for

which we observe public goods before and after the first election. Alternatively, we check that

our estimates are not driven by especially motivated villages that implemented their first

election before the national law by re-estimating our main equation using a sample restricted

to villages that held their first elections after 1987. We also check that our estimates are

not driven by selection within counties by instrumenting for the introduction of elections at

the village level with the introduction at the county level or with the introduction at the

province level. All of these robustness exercises produce estimates that are very similar in

magnitude to our baseline results.

The results in this section show that the baseline results are very robust and unlikely

to be confounded by other factors. They support the interpretation of the estimates as

capturing the causal effects of the introduction of village elections.

6 Re-Election Incentives vs. Leader Selection

In the literature in political agency, citizens use elections to control politicians through

two mechanisms.49 First, elections can help voters address moral hazard problems by re-

warding good performance with re-election – i.e, elections serve as means to provide the48They are available upon request.49This literature is large, starting with the seminal contribution of Barro (1973). For textbook treatments,

see Besley (2006), and Persson and Tabellini (2000) .

26

correct incentives to office holders. Second, voters can use elections to select the politicians

that are more competent or whose preferences are better aligned with citizens’ preferences.

In this section, we explore whether these forces are relevant in our context by estimating

the interaction effect of the introduction of elections and whether there was turnover for the

first election.

The impact of elections in villages where there was no turnover is interesting because it

isolates the effect of re-election incentives. This is because the presence of the same official

before and after elections rules out any effect due to villagers having selected a better official.

Table 7 presents the results. For comparison purposes, Panel A restates the average effect

of the introduction of elections on our main outcomes: public goods expenditure funded

by villagers, amount of land leased out to enterprises and the incomes of the ninetieth

percentile. In Panel B, we introduce the interaction of the introduction of elections with a

dummy variable that equals one for villages where there is VC turnover in the first election.50

In this specification, the effect of elections on villages that experienced no turnover (64%

of the villages in our sample) is captured by the uninteracted post first election coefficient.

For all of the outcomes examined, the sign of this coefficient has the same sign as the

average effect displayed in Panel A. The effect for public goods is statistically significant at

the 1% level and the coefficient is larger in magnitude than the average effect in Panel A.

The uninteracted coefficient for land and income are reduced in magnitude and no longer

statistically significant. These results suggest the re-election incentives contributed to the

average effect of introducing elections, at least for raising public goods expenditure.

The effect of elections on villages that experience turnover is the sum of the uninteracted

post-first-election coefficient and its interaction coefficient. The sums of the estimates in

Table 7 panel B are approximately zero for public goods, negative for the amount of land

leased to enterprises and negative for income of the ninetieth percentile households. However,

the joint estimates are very imprecise (they are not presented). The interaction coefficients,

which capture the differential effect of the introduction of elections between villages with and50This equation is similar to equation (2), with the addition of the interaction term.

27

without turnover, are also statistically insignificant for all outcomes. It is difficult to infer

the relative contribution of the re-election incentives and selection mechanisms from these

coefficients. The interaction effect cannot be interpreted as the effect of elections through

leader selection because leader turnover is endogenous. For example, elections could cause

leader turnover where villagers have particularly high demand for reducing the amount of

land that is leased out or the income of rich households.

In summary, the results suggest that re-election incentives contributed to the average

effect of the introduction of elections. At the same time, we cannot rule out selection effects,

which would be consistent with our finding that elections reduced the average age and

increased the average education of VCs (see Table 6).

7 Policies for Redistribution

In Section 5, we showed that the introduction of elections causes a fall in top incomes

and a modest increase of the ratio of median to top incomes. The goal of this section is to

understand how the village government brought about the reductions in income inequality

given that it was unable to impose recurrent taxes on income. We first examine whether

the reduction in inequality is achieved by an increase in the progressivity of local levies.

Then, we examine whether the introduction of elections reduced the ratio of median to top

incomes for the sources of income that can be influenced by the village government.

To explore these issues, we use household-level data that breaks down household income

and expenditure by type. We were able to obtain these data for a subsample of villages of

the NFS survey. This subsample comprises 78 villages in eighteen provinces. The observable

characteristics of these villages do not differ significantly from the full sample.51

The disaggregated expenditure data report the fees and levies paid by households. Un-

fortunately, the data only report the sum of local fees paid to the village and county govern-

ments and does not distinguish payments to the village government. Therefore, interpreting

the following results requires the assumption that elections did not change the taxes paid51See Online Appendix Table A.2 for a comparison of observables and Table A.6 which shows that the

effect of elections on income for the full sample are replicated in this subsample.

28

to county governments. To the best of our knowledge, this is true.52

On average, households in the subsample pay 198 RMB per year in local fees on average,

which is approximately two percent of total household income. According to our data,

this amounts to 64% of the fees that households pay to levels of government above the

county (excluding the value of grain taxes).53 To examine the distribution of fees across

village households, we examine household payments of local fees according to households’

positions in the income distribution. In Table 8 Panel A, we show the mean and standard

deviation of the local fees rate (i.e., annual household local fee payment as a fraction of

total household annual income) paid at different points of the village income distribution.

In Panel B, we show the same statistics for the base year of 1986. The rate appears to

be constant across deciles. If anything, the average local fee rates are weakly decreasing

in income, although the change is not statistically significant. In Panel C, we present the

effect of the introduction of elections on the fee rate. The coefficients for post first election

are all positive and statistically significant at the 10% or higher level. They are similar in

magnitude for households in different quintiles of the village income distribution. If anything,

the coefficient, and thus the increase is slightly smaller for higher income households. Thus,

there is no evidence that elections increased the progressivity of local fees and levies. This,

together with the very low overall rate suggest that local fee collection is not a relevant

redistributive channel.

Next, we examine the effect of elections on the different sources of household income.54

The data show that for the average household, income from agriculture is about 67% of

total income. Wage income, which in rural villages is mostly earned from village enterprises,

accounts for about an additional fifteen percent of income, and dividends and other enterprise

income makes up seven percent.55 Village enterprises and household access to land, which is52The main reform affecting local fees was the Tax and Fee Reform. The VDS documents the introduction

of this reform which occurred towards the very end of our sample. Controlling for the introduction of thisreform has no effect on our results.

53The largest proportion of taxes that agricultural households pay to the central government is in the formof grain, which the government buys at a below-market price that it sets. The value of this tax payment isnot included in the NFS category of taxes to the central government.

54See Online Appendix Table A.5 for a balance sheet for average household income and expenditure.55Village enterprises were officially called different names at different stages of the early reform era due

29

the main input leading to household agricultural income, are both under the control of the

village government. It follows that about 90% of average household income can be influenced

by the village government. If the VC desires to engage in limited redistribution, it thus can

reallocate high quality land, salaried jobs or dividend income across households, since all of

these sources of income are under his control. However, as land reallocations will be strongly

resisted by the households that lose land, we would expect these tools to be used sparingly.

In Table 9, we present the estimates for the effect of the introduction of elections on

the median to top income ratios for all sources income that our data reports, as well as

for household land allocation. Column (1) presents the result for total income, which is

comparable with the result for the full sample in Table 4 and statistically significant at

the 5% level. Columns (2)-(4) show that the introduction of elections had similarly sized

effects on each source of income; the ratios for agricultural income, wage income, enterprise

income and land all increase by around two percentage points. The estimate for agricultural

income is significant at the 1% level, and it is particularly relevant given the importance of

agriculture in household income. Enterprise income is also statistically significant at the 5%

level. The estimate for the median to top ratio of household land is positive, but slightly

smaller in magnitude than the other estimates and insignificant.

Taken together, the results on household level income and expenditure are consistent

with our understanding of the limited tools available to the village government for income

redistribution.56

8 Conclusion

In order to better control local officials and prevent shirking and rent-seeking, the Chinese

government introduced village-level elections starting in the 1980s. Our results suggest that

the reforms were successful in changing the incentives of local officials to favor the interests

to regulatory changes regarding the ownership of former collective assets. Hence, our category of incomefrom village enterprises is the sum of all of these types of incomes reported in the NFS (e.g., income fromcollectives, partnerships or cooperatives, and enterprise dividends). Income from collectives and enterprisedividends make up over 97% of this category.

56To check the robustness of our estimates, we conduct the same set of sensitivity checks as for the fullsample estimates. They are not discussed for brevity and are shown in Online Appendix Table A.7.

30

of the village majority over that of the village elites. In particular, we find that public

goods expenditure made by the village government increased, and that the increase was

entirely financed by funds collected from villagers. This is consistent with the notion that

the introduction of elections increased villagers’ willingness to contribute funds to the local

government when the latter became more accountable – i.e., when the village government

was more likely to provide the public goods desired by villagers. We also find that elections

induce village governments to lease less land to enterprises. Consistent with the view that

the rents created by these enterprises were being captured by the village elite, we find

that elections caused income reductions among the richest households, which resulted in

a moderate reduction in inequality. Finally, we show suggestive results that the limited

redistribution brought about by elections is happening through the manipulation of income

streams that the village government can influence through their control over land allocation

and village enterprises.

To the extent that this institutional reform can be understood as a marginal increase in

democracy in rural China, our results are consistent with recent theories that characterize

democracies as regimes that are likely to engage in redistribution (e.g. Acemoglu and Robin-

son, 2001, 2006; Boix, 2003) and to provide more public goods (e.g., Besley and Kudamatsu,

2008; Bueno de Mesquita et al., 2003).

It is beyond the scope of our study to provide a welfare assessment of the policy changes

induced by elections. Given the extremely low prevailing levels of public good provision,

the increase in public good expenditure is likely to enhance welfare. However, it is very

difficult to assess the welfare effect of the observed patterns of redistribution. On the one

hand, if village enterprises were productive and salaried jobs were allocated efficiently in

the pre-election regime, the scaling down of enterprises and the change in the allocation of

salaried jobs might have reduced aggregate welfare and disincentivized effort by productive

members of the community. Redistribution would in this case be very inefficient. On the

other hand, the reductions in income among the richest households could reflect a reduction

in rent-seeking if the households benefitting from village enterprises prior to elections were

31

the cronies of the village government rather than the most productive members of the

community.57 The truth probably lies somewhere between these two extremes and may vary

across villages. Assessing the welfare effects of the introduction of elections is obviously an

important question for future research.

This study opens several other interesting avenues of future research. One important

question regards the heterogeneous effects of elections, which can potentially provide in-

sights into the pre-conditions of successful elections. For example, in subsequent research,

we investigate the roles of social fragmentation and social capital in determining the effects

of elections on public goods. Also, the motivation for autocratic regimes to introduce local

democracy is an important subject for future research. In particular, it is important to

understand when local elections are a step towards wider regime change versus when they

are used as an instrument of control by the central regime.58 We hope that the detailed in-

stitutional and economic data we have constructed will help future researchers in addressing

these and other important questions.57This is certainly the interpretation of village government conduct in Brandt and Turner (2007), Kennedy

et al. (2004), Oi and Rozelle (2000), Rozelle (1994) and Rozelle and Li (1998)58The latter hypothesis is consistent with the qualitative evidence discussed in Section 2. It is also con-

sistent with Lorentzen’s (2010) thesis that the Chinese government creates mechanisms for citizens to voicetheir preferences as a way to monitor cadres and improve governance, empirical evidence on the difficulty ofcentral planning in the context of the Chinese Great Famine (Meng et al., 2010) and current province-leveleconomic performance (Persson and Zhuravskaya, 2011). In particular, Persson and Zhuravskaya (2011)argues that Beijing’s recent strategy of rewarding regional leaders for measurable targets causes regionalgovernments to under-invest in objects that are difficult to observe and objects that only yield returns inthe long run.

32

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35

Tab

le1:

Descriptive

Statistics

Varia

ble

Sour

ceO

bsM

ean

Std.

Dev

.#

of H

H in

Vill

age

NFS

3,64

142

1.81

280.

81N

ear C

ityN

FS5,

208

0.30

0.46

Tota

l Vill

age

Land

NFS

3,61

29,

245

14,7

19A

rabl

e La

nd (M

u)N

FS3,

612

2,29

52,

329

Sha

re o

f Vill

age

Land

that

is A

rabl

eN

FS3,

612

0.51

0.32

Use

d fo

r HH

Far

min

g (M

u)N

FS3,

612

2,21

52,

312

Not

Use

d fo

r HH

Far

min

g (M

u)N

FS3,

612

79.7

236

7.26

L

ease

d O

ut to

Ent

erpr

ises

(Mu)

NFS

3,61

260

.46

347.

61

Med

ian

HH

Ann

ual G

ross

Inco

me

Gro

wth

NFS

3,08

40.

069

0.18

9

The

Num

ber o

f Vill

age

Com

mitt

ee M

embe

rs

NFS

2,28

74.

362.

36Th

e N

umbe

r of V

illag

e Pa

rty C

adre

sN

FS2,

295

6.70

3.82

Party

Sec

reta

ry T

enur

eV

DS

5,20

810

.03

8.13

Vill

age

Chi

ef: T

enur

eV

DS

5,20

86.

696.

24

Has

Ele

ctio

nV

DS

5208

0.73

0.44

Has

Ope

n N

omin

atio

nV

DS

5208

0.20

0.40

Year

s bet

wee

n El

ectio

n In

trodu

ctio

ns in

Vill

age

and

Prov

ince

VD

S21

75.

025.

07Ye

ars b

etw

een

Elec

tion

Intro

duct

ions

in C

ount

y an

d Pr

ovin

ce**

VD

S21

74.

284.

67Ye

ars b

etw

een

Ele

ctio

n In

trodu

ctio

ns in

Vill

age

and

Cou

nty*

*V

DS

217

0.74

2.28

Year

s sin

ce la

st e

lect

ion

VD

S1,

084

3.16

1.02

VC

diff

eren

t fro

m p

revi

ous t

erm

*V

DS

4,31

20.

160.

361s

t Ele

ctio

n C

hang

ed V

C*

VD

S18

20.

380.

49

Not

es: E

ach

obse

rvat

ion

is a

t the

vill

age-

year

leve

l. V

DS

indi

cate

s tha

t the

var

iabl

e is

repo

rted

by th

e Vi

llage

Dem

ocra

cy

Surv

ey. N

FS in

dica

tes t

hat t

he v

aria

bles

are

repo

rted

by th

e N

atio

nal F

ixed

Poi

nt S

urve

y. *

Not

all

villa

ges r

etai

ned

reco

rds o

f V

C's

nam

es fr

om p

rior t

o th

e fir

st e

lect

ion.

**T

he y

ear o

f the

firs

t ele

ctio

n in

a c

ount

y is

bas

ed o

n re

spon

dent

reca

ll.

36

Table 2: Correlates of the Timing of the Introduction of Elections(1) (2) (3)

Dependent Variable: Year of 1st Election Coef. Obs R-Square

Near City -0.097 217 0.009Presence of Family with a Family Tree (jiapu) -0.109 217 0.012Presence of Family with Ancestral Temple (citang) -0.140 217 0.019Population Share of largest Clan 0.198 217 0.039Distance to High School 0.155 217 0.024Total Number of Households -0.324 217 0.105

Total Public Goods Exp (10,000 RMB) -0.015 217 0.000

Income 90th Percentile (RMB) -0.126 217 0.016Income 50th Percentile (RMB) -0.083 217 0.007Income 10th Percentile (RMB) -0.16 217 0.026

Income Growth 90th Percentile -0.115 217 0.013Income Growth 50th Percentile -0.075 217 0.006Income Growth 10th Percentile -0.119 217 0.014

Land Leased Out to Enterprises (Mu=1/15 Hectare) -0.145 217 0.021Land used for Household Farming 0.136 217 0.018Total Village Arable Land -0.156 217 0.024

One Child Exemptions -0.222 217 0.049Upper Government Land Expropriation -0.26** 217 0.068

Notes: Standardized coefficients are presented in column (1). These estimates use a cross section of villages. The control variables are measured in the base year (defined as the first year that data are available). All variables are demeaned by province fixed effects. Each coefficient is estimated from a bivariate regression of the residuals of the year of the first election on the residuals of the stated control variable. * and ** indicates statistical significance at the 10% and 5% levels.

37

Table 3: The Effect of the Introduction of Elections on Village Government Public GoodsExpenditure

(1) (2) (3)Obs. Mean Std. Dev.

Total 4,340 14.28 135.47 Irrigation 4,340 3.43 66.13 Schooling 4,340 0.02 0.35 Roads & Sanitation 4,340 5.07 88.21 Electricity 4,340 0.73 7.85 Environment 4,340 0.32 12.43 Other 4,340 2.72 49.70

From All Sources From Villagers From Other SourcesDependent Variable Mean 14.28 9.769 4.422Dependent Variable Mean 1986 6.248 3.649 2.599

Post 1st Election 15.45 16.37 -0.782(7.144) (7.705) (1.615)

Wild Bootstrap [0.018] [0.036] [0.734]

Observations 4,340 4,340 4,340R-squared 0.115 0.105 0.072Clusters 29 29 29

Dependent Variable: Public Goods Expenditures (10,000 RMB)

Notes: All regressions in Panel B control for the introduction of open nominations, province trends, village and year fixed effects. Standard errors, clustered at the province level, are presented in parentheses. Wild bootstrap p-values are presented in square brackets. The number of clusters is stated at the bottom of the table. The sample is a balanced village-level panel for the years 1986-2005.

B. Regression Results

A. Public Expenditure Categories (10,000 RMB)

38

Tab

le4:

The

Effe

ctof

theIntrod

uction

ofElections

onVillag

eLa

ndan

dtheHou

seho

ldIncome

Vill

age

Land

Le

ased

to

Ente

rpris

es

(Mu=

1/15

Hec

tare

)10

th25

th50

th75

th90

th

Inco

me

Rat

io

50th/9

0th

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Dep

. Var

. Mea

n 10

8.5

5,08

37,

378

10,5

2715

,337

24,4

760.

529

Post

1st

Ele

ctio

n-5

7.72

724

4.7

130.

9-1

52.1

-1,0

21-5

,056

0.01

67(3

2.47

2)(1

96.4

)(3

18.4

)(5

87.9

)(1

,230

)(2

,996

)(0

.007

)W

ild B

oots

trap

p-va

lue

[0.0

70]

[0.2

12]

[0.6

94]

[0.8

54]

[0.4

18]

[0.0

88]

[0.0

24]

Obs

erva

tions

2,03

43,

763

3,76

33,

763

3,76

33,

763

3,76

3R

20.

558

0.77

20.

822

0.82

90.

813

0.71

00.

597

Clu

ster

s28

2929

2929

2929

Perc

entil

es o

f the

With

in-V

illag

e D

istri

butio

n of

Tot

al

Hou

seho

ld In

com

e (R

MB

)

Dep

ende

nt V

aria

ble

Not

es: A

ll re

gres

sion

s con

trol f

or th

e in

trodu

ctio

n of

ope

n no

min

atio

ns, p

rovi

nce

trend

s, vi

llage

and

yea

r fix

ed e

ffect

s. St

anda

rd e

rror

s, cl

uste

red

at th

e pr

ovin

ce le

vel,

are

pres

ente

d in

par

enth

eses

. Wild

boo

tstra

p p-

valu

es a

re p

rese

nted

in

squa

re b

rack

ets.

The

num

ber o

f clu

ster

s are

stat

ed a

t the

bot

tom

of t

he ta

ble.

The

sam

ples

are

vill

age

leve

l pan

els.

The

sam

ple

in c

olum

n (1

) is r

estri

cted

to v

illag

es th

at e

ver l

ease

d la

nd to

ent

erpr

ises

prio

r to

the

first

ele

ctio

n an

d in

clud

es th

e ye

ars 1

987-

2005

, exc

ept f

or 1

992

and

1994

. The

dep

ende

nt v

aria

ble

is th

e am

ount

of l

and

leas

ed o

ut in

yea

r t+1

(i.e

., a

lead

va

riabl

e). C

olum

ns (2

)-(7

) inc

lude

all

villa

ges a

nd th

e ye

ars 1

986-

2005

, exc

ept f

or 1

992

and

1994

. The

pan

els a

re n

ot fu

lly

bala

nced

bec

ause

of m

issi

ng v

alue

s in

the

depe

nden

t var

iabe

s.

39

Table 5: The Effect of the Introduction of Elections on Village Government Public GoodsExpenditure, Village Land and Household Income – Robustness to Controls

(1) (2) (3) (4) (5) (6) (7) (8)

Baseline

Control for Prov

Introduction of 1st Election

Control for Prov-Year

FE

Control for Prov Per

Capita GDP and Growth

Omit Early and Late

Introducers

Control for Year FE x Base Year Vars (One

Child Policy and Upper Government Land Expropriation)

Control for Year FE x Near City, Social Capital, Post Tax & Fee

Omit if Ever Merged with

Another Village

Post 1st Election 15.455 13.555 14.438 17.942 14.567 15.836 16.020 15.406(7.144) (6.059) (9.049) (7.853) (6.880) (7.016) (7.537) (7.858)

Wild Bootstrap [0.018] [0.018] [0.108] [0.014] [0.012] [0.048] [0.028] [0.078]

Observations 4,340 4,340 4,340 4,018 4,100 4,340 4,340 3,500R-squared 0.115 0.116 0.215 0.136 0.128 0.213 0.130 0.115Clusters 29 29 29 29 29 29 29 29

Post 1st Election -57.727 -55.563 -49.482 -54.178 -57.211 -50.189 -58.631 -52.162(32.472) (32.898) (30.816) (30.785) (33.405) (39.526) (31.474) (37.345)

Wild Bootstrap [0.070] [0.076] [0.082] [0.088] [0.058] [0.140] [0.084] [0.190]

Observations 2,034 2,034 2,034 1,919 1,940 2,034 2,034 1,740R-squared 0.558 0.559 0.744 0.591 0.559 0.564 0.578 0.614Clusters 28 28 28 28 28 28 28 27

Post 1st Election -5,056 -5,087 -4,738 -4,424 -3,152 -5,032 -4,764 -5,667(2,996) (3,051) (3,258) (3,047) (2,447) (2,817) (2,728) (3,587)

Wild Bootstrap [0.088] [0.088] [0.114] [0.154] [0.208] [0.178] [0.070] [0.096]

Observations 3,763 3,763 3,763 3,477 3,553 3,763 3,763 3,035R-squared 0.710 0.710 0.757 0.715 0.719 0.711 0.718 0.696Clusters 29 29 29 29 29 29 29 29

Notes: All regressions control for the introduction of open nominations, province trends, village and year fixed effects, and the additional controls stated in the column headings. Standard errors, clustered at the province level, are presented in parentheses. Wild bootstrap p-values are presented in square brackets. The number of clusters are stated at the bottom of the table. The samples are village level panels. Panel A includes the years 1986-2005. Panel B is restricted to villages that ever leased land to enterprises prior to the first election and includes the years 1987-2004, except for 1992 and 1994. The dependent variable is the amount of land leased out in year t+1 (i.e., a lead variable). Panel C includes all villages and the years 1986-2005, except for 1992 and 1994. Additional sample exclusions are stated in column headings. The panels are not fully balanced because of missing values in the dependent variabes.

A. Public Goods Expenditure from Villagers (10,000 RMB)

B. Village Land Leased to Enterprises (Mu=1/15 Hectare)

C. Household Income at the 90th Percentile (RMB)

Dependent Variable

40

Table 6: The Effect of the Introduction of Elections on the Characteristics of the VC andPS

Turnover Age Years of Edu Party Member(1) (2) (3) (4)

Dep. Var Mean 0.158 42.15 7.883 0.765

Post 1st Election 0.045 -2.442 0.791 -0.034(0.020) (1.037) (0.224) (0.043)

Wild Bootstrap p-value [0.001] [0.040] [0.000] [0.468]

Obs 4,312 4,188 4,194 4,274R2 0.065 0.430 0.611 0.484

Dep. Var Mean 0.151 44.35 8.417

Post 1st Election 0.011 0.312 -0.121(0.021) (0.632) (0.139)

Wild Bootstrap p-value [0.199] [0.607] [0.478]

Obs 4,365 3,546 4,356R2 0.072 0.677 0.572

Dependent VariablesA. Village Chairman (VC)

B. Party Secretary (PS)

Notes: All regressions control for post-open nomination, province trends, and village and year fixed effects. Standard errors, clustered at the province level, are reported in parentheses. Wild bootstrap p-values, clustered at the province level are presented in square brackets. The sample is a panel of villages for the years 1982-2005. The number of observations vary across columns due to missing values in the dependent variable.

41

Tab

le7:

The

Effe

ctof

theIntrod

uction

ofElections

forVillages

whe

rethePre-E

lectionIncu

mbe

ntRem

ainedin

Office

(1)

(2)

(3)

Publ

ic G

oods

Exp

endi

ture

fro

m V

illag

ers (

10,0

00

RMB)

Villa

ge L

and

Leas

ed

to E

nter

prise

s (M

u=1/

15 H

ecta

re)

Hou

seho

ld In

com

e 90

th P

erce

ntile

(RM

B)

Post

1st E

lect

ion

16.3

7-5

7.73

-5,0

56(7

.705

)(3

2.47

)(2

,996

)

Wild

Boo

tstra

p p-

valu

e[0

.036

][0

.070

][0

.088

]

Obs

erva

tions

4,34

02,

034

3,76

3R-

squa

red

0.10

50.

558

0.71

0Cl

uste

rs29

2829

Post

1st E

lect

ion

55.9

7-1

9.33

-2,7

24(2

9.44

)(3

6.75

)(2

,484

)

Wild

Boo

tstra

p p-

valu

e[0

.043

][0

.626

][0

.240

]

Post

1st E

lect

ion

x 1s

t Ele

ctio

n V

C Ch

ange

-4

2.08

-39.

85-2

,484

(29.

16)

(20.

05)

(2,6

64)

Wild

Boo

tstra

p p-

valu

e[0

.396

][0

.434

][0

.506

]

Obs

erva

tions

4,34

02,

034

3,76

3R2

0.11

20.

558

0.71

0Cl

uste

rs29

2829

Not

es:A

llre

gres

sions

cont

rolf

orth

ein

trodu

ctio

nof

open

nom

inat

ions

,pro

vinc

etre

nds,

villa

gean

dye

arfix

edef

fect

s.Th

ose

inPa

nelB

addi

tiona

llyco

ntro

lfor

the

inte

ract

ion

ofop

enno

min

atio

nsw

ithth

efir

stel

ectio

nV

Ctu

rnov

erdu

mm

yva

riabl

e.St

anda

rder

rors

,cl

uste

red

atth

epr

ovin

cele

vel,

are

pres

ente

din

pare

nthe

ses.

Wild

boot

strap

p-va

lues

are

pres

ente

din

squa

rebr

acke

ts.Th

enu

mbe

rofc

luste

rsar

esta

ted

atth

ebo

ttom

ofth

eta

ble.

The

sam

ples

are

villa

ge-le

vel

pane

ls.Co

lum

n(1

)inc

lude

sth

eye

ars

1986

-200

5.Co

lum

n(2

)is

restr

icte

dto

villa

ges

that

ever

leas

edla

ndto

ente

rpris

espr

ior

toth

efir

stel

ectio

nan

din

clud

esth

eye

ars

1987

-200

5,ex

cept

for

1992

and

1994

.The

depe

nden

tvar

iabl

eis

the

amou

ntof

land

leas

edou

tin

year

t+1

(i.e.

,ale

adva

riabl

e).C

olum

n(3

)inc

lude

sth

eye

ars

1986

-200

5,ex

cept

for1

992

and

1994

.The

pane

lsus

edin

colu

mns

(2)

and

(3)

are

notf

ully

bala

nced

beca

use

ofm

issin

gva

lues

inth

ede

pend

ent

varia

bles

.

A. B

asel

ine

B. In

tera

cted

with

Whe

ther

ther

e w

as V

C Tu

rnov

er in

the

1st E

lect

ion

Dep

ende

nt V

aria

ble

42

Tab

le8:

The

Effe

ctof

theIntrod

uction

ofElections

onHou

seho

ldPay

mentof

LocalF

ees

0 - 2

0th

20th

- 40

th40

th -

60th

60th

- 80

th80

th -

100t

h(1

)(2

)(3

)(4

)(4

)

Mea

n3.

141

2.74

62.

476

2.17

31.

749

St. D

ev.

3.34

02.

782

2.53

02.

255

1.96

6

Mea

n2.

675

2.44

12.

247

2.14

91.

931

St. D

ev.

2.32

92.

137

1.96

91.

917

1.79

8

Post

1st

Ele

ctio

n0.

522

0.39

10.

406

0.38

80.

315

(0.2

46)

(0.2

14)

(0.2

06)

(0.1

90)

(0.1

31)

Wild

Boo

tstra

ps[0

.072

][0

.094

][0

.088

][0

.076

][0

.036

]

Obs

erva

tions

2,79

22,

792

2,79

22,

792

2,79

1R

20.

542

0.59

80.

609

0.62

50.

583

Clu

ster

s18

1818

1818

Not

es: A

ll re

gres

sion

s con

trol f

or th

e in

trodu

ctio

n of

ope

n no

min

atio

ns, p

rovi

nce

trend

s, vi

llage

and

yea

r fix

ed e

ffect

s. St

anda

rd e

rror

s, cl

uste

red

at th

e pr

ovin

ce le

vel,

are

pres

ente

d in

par

enth

eses

. The

num

ber o

f clu

ster

s are

stat

ed a

t the

bot

tom

of t

he ta

ble.

The

sam

ples

are

vi

llage

-leve

l pan

els a

nd in

clud

e 78

vill

age

for t

he y

ears

198

7-20

05. D

ata

for 1

992

and

1994

are

inte

rpol

ated

. The

pan

el is

not

fully

ba

lanc

ed b

ecau

se o

f mis

sing

val

ues i

n th

e de

pend

ent v

aria

bles

.

Pane

l A. M

ean

Hou

seho

ld A

nnua

l Loc

al T

ax P

aym

ents

(% o

f Ann

ual H

ouse

hold

Inco

me)

-- A

ll Ye

ars

Pane

l B. M

ean

Hou

seho

ld L

ocal

Tax

Pay

men

ts (

% o

f Hou

seho

ld In

com

e in

198

6) --

In B

asel

ine

Year

(198

6)

Pane

l C. T

he E

ffect

of t

he In

trodu

ctio

n of

Ele

ctio

ns (A

ll Ye

ars)

Dep

ende

nt V

aria

ble:

Hou

seho

ld A

nnua

l Loc

al T

ax P

aym

ents

(% o

f Hou

seho

ld A

nnua

l Inc

ome)

Tota

l Hou

seho

ld In

com

e Q

uint

iles

43

Tab

le9:

The

Effe

ctof

theIntrod

uction

ofElections

onHou

seho

ldIncomean

dFa

rmland

According

toPre-electionPositions

ontheVillag

eDistribution

Tota

lA

gric

ultu

reW

age

Ente

rpris

es(1

)(2

)(3

)(4

)(5

)

Dep

. Var

. Mea

n0.

527

0.46

30.

145

0.08

410.

591

Dep

. Var

. Mea

n 19

860.

538

0.49

80.

0325

0.09

860.

608

Post

1st

Ele

ctio

n0.

016

0.02

10.

019

0.02

60.

013

(0.0

08)

(0.0

07)

(0.0

17)

(0.0

13)

(0.0

17)

Wild

Boo

tstra

p p-

valu

e[0

.090

][0

.018

][0

.284

][0

.016

][0

.526

]

Obs

2,79

22,

792

2,56

42,

257

2,76

0R

20.

568

0.72

30.

651

0.65

80.

633

Clu

ster

s18

1818

1818

Not

es: A

ll re

gres

sion

s con

trol f

or th

e in

trodu

ctio

n of

ope

n no

min

atio

ns, p

rovi

nce

trend

s, vi

llage

and

ye

ar fi

xed

effe

cts.

Stan

dard

err

ors,

clus

tere

d at

the

prov

ince

leve

l, ar

e pr

esen

ted

in p

aren

thes

es.

Wild

boo

tstra

p p-

valu

es a

re p

rese

nted

in sq

uare

bra

cket

s. Th

e nu

mbe

r of c

lust

ers a

re st

ated

at t

he

botto

m o

f the

tabl

e. T

he sa

mpl

es a

re v

illag

e-le

vel p

anel

s and

incl

ude

78 v

illag

e fo

r the

yea

rs 1

987-

2005

. Dat

a fo

r 199

2 an

d 19

94 a

re in

terp

olat

ed. T

he p

anel

is n

ot fu

lly b

alan

ced

beca

use

of m

issi

ng

valu

es in

the

depe

nden

t var

iabl

es. T

he n

umbe

r of o

bser

vatio

ns v

ary

acro

ss c

olum

ns d

ue to

mis

sing

va

lues

repo

rted

for t

he d

epen

dent

var

iabl

es.

Dep

ende

nt V

aria

ble

50th

/90t

h In

com

e R

atio

50th

/90t

h La

nd R

atio

44

Figure 1: The the Effect of the Introduction of Elections for Each Year Since the FirstElection

(a) Public Goods Expenditure (10,000RMB = 1,428 USD)

-20

020

4060

Coe

f of D

umm

y Va

rs fo

r Yea

rs S

ince

1st

Ele

ctio

n

-5 0 5Years Since 1st Election

(b) Village Arable Land that is Leased Outto Enterprises (Mu = 1/15 Hectare)

-80

-60

-40

-20

020

Coe

f of D

umm

y Va

rs fo

r Yea

rs S

ince

1st

Ele

ctio

n

-5 0 5Years Since 1st Election

(c) 90th Percentile Household Income(RMB = 0.14 USD)

-600

0-4

000

-200

00

2000

Coe

f of D

umm

y Va

rs fo

r Yea

rs S

ince

1st

Ele

ctio

n

-5 0 5Years Since 1st Election

Notes: These figures plot the coefficients for dummy variables for the number of years sincethe first election. The estimates control for the introduction of open nominations, province-year trends and village fixed effects. The samples are balanced panels of villages from fiveyears prior until five years after the first election. The reference group, indicated as -4 yearson the x-axis, comprises of five and four years prior to the first election; we plot a y-axisvalue of zero for this group. The coefficients and standard errors are reported in OnlineAppendix Table A.4.

45

A ONLINE APPENDIX

A.1 Data Appendix

The variables for upper-government land expropriation and One Child Policy exemptions

are from the VDS. To ensure truthful reporting, we ask the respondents to check the years

in which the village experienced any permanent loss of village land due to upper-government

expropriation, and to check the years in which any household in the village had a second or

higher parity birth. Respondents’ answers are based on village records and rosters. In a com-

panion paper, we check that changes in expropriation correspond to changes in total village

land (reported in the NFS) and changes in One Child Policy exemptions correspond to the

number of children age 7-13 seven years later (reported in the NFS). The questionnaire for the

VDS is available online at http://www.econ.yale.edu/~nq3/NANCYS_Yale_Website/styled-

4/styled-5/index.html.

A.2 Demand for Public Goods

According to our interpretation of the effect of elections, the public goods funded by

the increase in expenditures should correspond to the demands of a majority of villagers.

To determine whether this is the case, we perform an additional exercise where we proxy

for villager demand. Within the constraints of our data, we are able to examine irrigation

expenditure, which is the single largest item of public goods provision comprising 24% of

average expenditure. We proxy for the demand for irrigation expenditure with the share of

total village land that is arable in 1987 (the first year that land data are available) with the

logic that villagers with very little arable land will have high demand for irrigation, where

as villagers with access to a lot of arable land will have less demand for irrigation. In the

extreme case where a village is fully irrigated, villagers may even want to reduce the amount

of irrigation in order to have land for other purposes. Following this logic, we estimate

an equation that is similar to the baseline specification, equation (1) with the following

modifications. First, the dependent variable is a dummy variable for whether any public

expenditure on irrigation is made in a given year. Second, we create a dummy variable for

1

whether the share of arable land of a village in 1987 is below or above the sample median

and interact this dummy variable with the introduction of elections (and open nominations).

To ensure that differences in arable land share in 1987 do not influence the outcome through

channels other than the introduction of elections, we also control for the 1987 arable land

share interacted with year fixed effects.59

Column (1) in Table A.3 shows the effect of elections on irrigation investment. The

positive uninteracted coefficient shows that elections increased expenditure on irrigation for

villages that had arable share below the sample median in 1987. The estimate is statisti-

cally significant at the 1% level. The negative interaction coefficient suggests that elections

reduced expenditure in irrigation for villages with above median arable share land in 1987.

The estimate is statistically insignificant.

In column (3), we investigate the effect on schooling, which mostly refers to primary

schools. We proxy for the demand for schools with the number of children age zero to six

in 1986 (the first year that are available for children). Our logic is that villages with many

young children will demand more public schools than villages with few children. Using a

similar equation as in column (1), except that we substitute the demand proxies, we find

that the uninteracted coefficient is negative. This suggests that elections reduced public

expenditure on schooling in villages where the number of young children was below the

sample median in 1986. The interaction effect is positive, which suggests that elections

increased expenditures in public schooling in villages where there were many young children

in 1986. However, neither estimate is statistically significant.

Finally, we investigate the effect on public goods provision. Since our outcome variable

is obtained from village accounts, it is, in principle, possible that village leaders changed the

numbers they recorded without actually raising funds or increasing provision. Alternatively,59The variables for village land used for household farming is reported by the NFS. The estimating equation

can be written as

Yvpt = θEvpt +ζ Ovpt +β (Evpt ×Xvp)+λ (Ovpt ×Xvp)+θtXvp + γpt +δv +ρt + εvpt , (2)

where Xvp is a measure of the share of arable village land in 1987. The main effect of this time-invariantvariable is absorbed by village fixed effects. θ̂ is the effect of elections on villages with no arable land in1987. β̂ + θ̂x is the effect of elections for villages where the share of arable land in 1987 equals x.

2

village leaders may have raised funds but stolen them and then fabricated the numbers for

expenditure in the village accounts. The ideal way to check the relevance of these concerns

for our context is to investigate whether elections actually increase the provision of public

goods. We cannot do this due to data limitations. Instead, we are able to proxy for the

provision of irrigation with the share of arable land in a village. This follows the premise that

increased irrigation will likely increase the share of land that is arable. We can also proxy

for expenditure on schooling with the presence of a primary school, the data for which we

collected in the VDS. Columns (2) and (4) show that the signs of the estimates are consistent

with those for expenditures. However, they are imprecise. The estimates for arable land in

columns (2) are only significant at the 20% and 15% levels. The estimates for the primary

school dummy is significant at the 5% and 1% levels, but becomes insignificant with the

wild bootstraps.

3

Table A.1: The Timing of Electoral Reforms

Number of Villages Introducing

Cumulative % of Villages

Number of Villages Introducing

Cumulative % of Villages

Year (1) (2) (3) (4)

1982 13 5.99 1 0.721983 13 11.98 1 1.441984 42 31.34 7 6.471985 3 32.72 0 6.471986 35 48.85 4 9.351987 12 54.38 1 10.071988 7 57.6 1 10.791989 15 64.52 1 11.511990 25 76.04 1 12.231991 1 76.5 0 12.231992 3 77.88 1 12.951993 6 80.65 3 15.111994 2 81.57 3 17.271995 9 85.71 3 19.421996 4 87.56 18 32.371997 3 88.94 0 32.371998 6 91.71 6 36.691999 9 95.85 42 66.912000 7 99.08 12 75.542001 2 100 12 84.172002 0 100 11 92.092003 0 100 3 94.242004 0 100 1 94.962005 0 100 7 100

Total 217 139

First Open Nominations (Haixuan)First Election

Notes: Each observation is a village. The sample comprises a balanced panel of 217 villages for 1982 to 2005.

4

Tab

leA.2:Descriptive

Statistics

forHou

seho

ldIncomes

intheFu

llSa

mplean

dtheHou

seho

ldSu

bsam

pleof

Villag

es

Varia

ble

Obs

Mea

nSt

d. D

ev.

Obs

Mea

nSt

d. D

ev.

# of

HH

in V

illag

e3,

641

421.

8128

0.81

2,50

742

0.12

288.

48N

ear C

ity5,

208

0.30

0.46

2,79

80.

270.

44

Tota

l Vill

age

Land

3,61

29,

245

14,7

192,

495

7,22

410

,119

Ara

ble

Land

(Mu)

3,61

22,

295

2,32

92,

495

1,78

21,

188

Sha

re o

f Vill

age

Land

that

is A

rabl

e3,

612

0.51

0.32

2,49

50.

520.

31 U

sed

for H

H F

arm

ing

(Mu)

3,61

22,

215

2,31

22,

495

1,70

51,

173

Not

Use

d fo

r HH

Far

min

g (M

u)3,

612

79.7

236

7.26

2,49

577

.25

351.

67

Lea

sed

Out

to E

nter

pris

es (M

u)3,

612

60.4

634

7.61

2,65

561

.85

327.

37

Med

ian

HH

Ann

ual G

ross

Inco

me

Gro

wth

3,08

40.

069

0.18

92,

145

0.06

80.

185

The

Num

ber o

f Vill

age

Com

mitt

ee M

embe

rs

2,28

74.

362.

361,

583

4.22

2.08

The

Num

ber o

f Vill

age

Party

Cad

res

2,29

56.

703.

821,

587

6.98

3.84

Party

Sec

reta

ry T

enur

e5,

208

10.0

38.

132,

798

10.7

17.

82V

illag

e C

hief

: Ten

ure

5,20

86.

696.

242,

798

7.38

5.89

Has

Ele

ctio

n52

080.

730.

4427

980.

840.

36H

as O

pen

Nom

inat

ion

5208

0.20

0.40

2798

0.24

0.43

Year

s bet

wee

n El

ectio

n In

trodu

ctio

ns in

Vill

age

and

Prov

ince

217

5.02

5.07

2798

5.10

4.98

Year

s bet

wee

n El

ectio

n In

trodu

ctio

ns in

Cou

nty

and

Prov

ince

**21

74.

284.

6727

984.

404.

63Ye

ars b

etw

een

Ele

ctio

n In

trodu

ctio

ns in

Vill

age

and

Cou

nty*

*21

70.

742.

2827

980.

702.

25Ye

ars s

ince

last

ele

ctio

n1,

084

3.16

1.02

717

3.19

1.07

VC

diff

eren

t fro

m p

revi

ous t

erm

*4,

312

0.16

0.36

2,50

50.

160.

361s

t Ele

ctio

n C

hang

ed V

C*

182

0.38

0.49

2,50

50.

160.

36

Full

Sam

ple

Hou

seho

ld S

ampl

e

Not

es: E

ach

obse

rvat

ion

is a

t the

vill

age-

year

leve

l. V

DS

indi

cate

s tha

t the

var

iabl

e is

repo

rted

by th

e Vi

llage

Dem

ocra

cy S

urve

y. N

FS in

dica

tes t

hat t

he

varia

bles

are

repo

rted

by th

e N

atio

nal F

ixed

Poi

nt S

urve

y. *

Not

all

villa

ges r

etai

ned

reco

rds o

f VC

's na

mes

from

prio

r to

the

first

ele

ctio

n. *

*The

yea

r of

the

first

ele

ctio

n in

a c

ount

y is

bas

ed o

n re

spon

dent

reca

ll.

5

Table A.3: The Effect of Elections on Public Expenditure on Irrigation and Schooling

(1) (2) (3) (4)

Any Expenditure

(Dummy Var)

Arable Land Share

(Fraction)

Any Expenditure

(Dummy Var)

The Village has a Primary

School (Dummy Var)

Dependent Variable Mean 0.0504 0.513 0.0541 0.885

Post 1st Election 0.0661 0.0433 -0.0281 -0.0415(0.0182) (0.0308) (0.0185) (0.0196)

Wild Bootstrap [0.002] [0.208] [0.948] [0.940]Post 1st Election x High Base Year Arable Land Share -0.0435

(0.0338)

Wild Bootstrap [0.218]

Post 1st Election x Base Year Arable Land Share -0.118(0.0734)

Wild Bootstrap [0.118]Post 1st Election x High Base Year # Kids 0.0357

(0.0259)Wild Bootstrap [0.958]

Post 1st Election x Base Year # Kids 0.000105(0.000006)

Wild Bootstrap [0.986]

Observations 3316 3316 4340 4279R-squared 0.139 0.920 0.122 0.796Clusters 28 28 29 27

Dependent Variable: Public Expenditure onIrrigation Schools

Notes: The controls for arable land share and the number of kids are measured in the base year (the first year that data are available, 1986 for kids, 1987 for land). The explanatory interaction terms in columns (1) and (3) use dummy variables that indicate whether a village is above the median in terms of arable land share and the number of children, respectively. All regressions control for the introduction of open nominations, province trends, village and year fixed effects, as well as the interaction terms of post open nominations and the relevant base year variable. In addition, columns (1) and (2) control for the interaction of year fixed effects and the relevant base year variable. Standard errors, clustered at the province level, are presented in parentheses. Wild bootstrap p-values are presented in square brackets. The number of clusters are stated at the bottom of the table. The samples are village-level panels. Columns (3)-(4) include the years 1986-2005. Columns (1)-(2) include the years 1986-2005, except for the years 1992 and 1994. The panels are not fully balanced because of missing values in the dependent variabes.

6

Tab

leA.4:The

Effe

ctof

theIntrod

uction

ofElections

forEachYearSinc

etheFirst

Election

(1)

(2)

(3)

(4)

(5)

(6)

coef

seco

efse

coef

seD

umm

y Va

r for

# o

f Yea

rs si

nce

Firs

t Ele

ctio

n-4

0.

0.

0.

-33.

106

(10.

43)

238.

5(5

87.6

)1.

017

(47.

03)

-22.

182

(13.

99)

-298

.9(1

,592

)9.

961

(69.

48)

-1-3

.034

(17.

97)

-63.

46(2

,124

)-1

9.18

(85.

18)

0 (1

st E

lect

ion)

4.35

4(2

4.19

)1,

632

(3,5

53)

14.2

1(1

14.8

)1

65.0

6(7

2.51

)53

5.4

(3,5

91)

-59.

18(1

45.5

)2

-19.

04(3

8.28

)-2

,130

(4,5

63)

-72.

32(1

82.8

)3

15.6

4(2

4.93

)-2

,229

(4,9

76)

-47.

50(2

05.6

)4

-18.

64(7

2.22

)-3

11.6

(6,6

05)

-52.

90(2

22.4

)5

7.78

1(7

5.90

)-5

,885

(8,0

06)

-20.

24(2

62.8

)

Obs R2

Clu

ster

sJo

int p

-val

ue (P

re-E

lect

ion=

0)

Publ

ic G

oods

Exp

(R

MB

)

550

0.14

7

Not

es: A

ll re

gres

sion

s con

trol v

illag

e an

d ca

lend

ar y

ear f

ixed

effe

cts.T

he re

fere

nce

year

is fo

ur y

ears

prio

r to

the

first

ele

ctio

n. S

tand

ard

erro

rs a

re c

lust

ered

at t

he p

rovi

nce

leve

l. Th

e nu

mbe

r of c

lust

ers a

nd th

e p-

valu

e fo

r the

jo

int s

igni

fican

ce o

f the

pre

-ref

orm

yea

rs a

re p

rese

nted

at t

he b

otto

m o

f the

tabl

e. C

olum

ns (3

)-(4

) add

ition

ally

re

stric

t the

sam

ple

to v

illag

es th

at e

ver l

ease

d la

nd to

ent

erpr

ises

prio

r to

the

first

ele

ctio

n. T

he sa

mpl

es c

ompr

ise

of b

alan

ced

pane

ls o

f vill

ages

that

incl

ude

10 y

ears

: fro

m fi

ve y

ears

bef

ore

until

five

yea

rs a

fter t

he fi

rst

elec

tion.

The

refe

renc

e ye

ar c

ompr

ises

of f

ive

(-5)

and

four

(-4)

yea

rs b

efor

e th

e fir

st e

lect

ion.

Land

Lea

sed

out t

o En

terp

rises

(Mu)

90th

Per

cent

ile H

ouse

hold

In

com

e (R

MB

)

Dep

ende

nt V

aria

ble

0.48

20.

435

0.18

4

0.83550

466

0.82

516

1816

7

Table A.5: Balance Sheet of Household Income and Expenditure

Obs Mean Std. Dev.Total Income 2,798 13,161 15,338 from agriculture (and home production) 2,798 8,853 11,140 from wages 2,798 2,090 3,280 village enterprise income 2,798 902 2,245 other 2,798 1,316 3,081

Total Expenditures 2,798 6,176 13,629 Household management expenditures 2,798 1,963 6,639 Taxes to central government 2,798 128 386 Levies and fees to local governments 2,798 82 162 Total Consumption 2,798 3,424 6,645

Notes: Village enterprise income is the sum of income from collectives, dividends and parternship/ cooperatives. The sample comprises of an unbalanced panel of 160 villages in 80 provinces for the years for the years 1986-2005. Data for 1992 and 1994 are interpolated as the average of data from one year prior and one year afterwards.

8

Table A.6: The Effect of the Introduction of Elections on Household Income – Comparisonof Full Sample and Village Subsample Estimates

Percentiles of the Village Income Distribution: 10th 25th 50th 75th 90th

(1) (2) (3) (4) (5)

Dependent Variable Mean 5,083 7,378 10,527 15,337 24,476

Post 1st Election 245 131 -152 -1,021 -5,056(196) (318) (588) (1,230) (2,996)

Wild Bootstrap [0.212] [0.694] [0.854] [0.418] [0.088]

Observations 3,763 3,763 3,763 3,763 3,763R-squared 0.772 0.822 0.829 0.813 0.71Clusters (# Provinces) 29 29 29 29 29# Villages 217 217 217 217 217

Dependent Variable Mean 4,454 6,451 9,162 13,250 20,843

Post 1st Election -121 -262 -655 -1,537 -4,631(268) (465) (895) (1,718) (4,060)

Wild Bootstrap [0.680] [0.620] [0.456] [0.440] [0.320]

Observations 1,347 1,347 1,347 1,347 1,347R-squared 0.764 0.826 0.820 0.793 0.733Clusters (# Provinces) 17 17 17 17 17# Villages 78 78 78 78 78

B. Household Level Subsample

A. Full Sample

Dependent Variable: Household Income (RMB)

Notes: All regressions control for the introduction of open nominations, province trends, village and year fixed effects. Standard errors, clustered at the province level, are presented in parentheses. Wild bootstrap p-values are presented in square brackets. The number of clusters are stated at the bottom of the table. The samples are village-level panels and include the years 1987-2005.In Panel B, data for 1992 and 1994 are interpolated. The panels are not fully balanced because of missing values in the dependent variabes. The number of villages are stated at the bottom of each panel.

9

Tab

leA.7:The

Effe

ctof

theIntrod

uction

ofElections

onHou

seho

ldIncomean

dFa

rmland

Ratios–Rob

ustnessto

Con

trols

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Bas

elin

eC

ontro

l for

Pro

v In

trodu

ctio

n of

1s

t Ele

ctio

n

Con

trol f

or P

rov-

Year

FE

Con

trol f

or P

rov

Per C

apita

GD

P an

d G

row

th

Om

it Ea

rly a

nd

Late

Intro

duce

rs

Con

trol f

or Y

ear

FE x

Bas

e Ye

ar

Vars

(One

Chi

ld

Polic

y an

d U

pper

G

over

nmen

t La

nd

Expr

opria

tion)

Con

trol f

or Y

ear

FE x

Nea

r City

, So

cial

Cap

ital,

Post

Tax

& F

ee

Om

it if

Ever

M

erge

d w

ith

Ano

ther

Vill

age

Post

1st

Ele

ctio

n0.

016

0.01

50.

015

0.01

80.

010

0.01

70.

017

0.01

0(0

.008

)(0

.008

)(0

.011

)(0

.009

)(0

.007

)(0

.008

)(0

.008

)(0

.006

)

Obs

erva

tions

2,79

22,

792

2,79

22,

582

2,61

62,

792

2,79

22,

215

R2

0.56

90.

569

0.61

30.

583

0.57

60.

577

0.57

90.

567

Clu

ster

s18

1818

1818

1818

18

Post

1st

Ele

ctio

n0.

021

0.02

00.

021

0.02

30.

016

0.02

40.

020

0.02

2(0

.007

)(0

.007

)(0

.010

)(0

.009

)(0

.007

)(0

.006

)(0

.008

)(0

.007

)

Obs

erva

tions

2,79

22,

792

2,79

22,

582

2,61

62,

792

2,79

22,

215

R2

0.72

40.

724

0.74

60.

730

0.72

00.

731

0.72

80.

741

Clu

ster

s18

1818

1818

1818

18

Post

1st

Ele

ctio

n0.

019

0.02

00.

029

0.01

30.

013

0.01

90.

019

-0.0

00(0

.017

)(0

.017

)(0

.022

)(0

.019

)(0

.019

)(0

.016

)(0

.015

)(0

.015

)

Obs

erva

tions

2,56

42,

564

2,56

42,

367

2,39

42,

564

2,56

42,

065

R2

0.65

10.

651

0.68

60.

679

0.64

80.

657

0.65

60.

657

Clu

ster

s18

1818

1818

1818

18

Post

1st

Ele

ctio

n0.

026

0.02

50.

020

0.02

40.

024

0.02

40.

022

0.02

2(0

.013

)(0

.013

)(0

.016

)(0

.013

)(0

.017

)(0

.014

)(0

.015

)(0

.012

)

Obs

erva

tions

2,25

72,

257

2,25

72,

065

2,08

92,

257

2,25

71,

811

R2

0.65

80.

660

0.69

90.

675

0.64

40.

664

0.66

80.

610

Clu

ster

s18

1818

1818

1818

18

Post

1st

Ele

ctio

n0.

013

0.01

30.

015

0.01

60.

008

0.01

10.

008

0.01

7(0

.017

)(0

.017

)(0

.018

)(0

.016

)(0

.018

)(0

.017

)(0

.014

)(0

.019

)

Obs

erva

tions

2,76

02,

760

2,76

02,

550

2,59

62,

760

2,76

02,

183

R2

0.63

30.

633

0.66

30.

641

0.64

50.

639

0.64

30.

642

Clu

ster

s18

1818

1818

1818

18

Notes: A

ll re

gres

sion

s con

trol f

or th

e in

trodu

ctio

n of

ope

n no

min

atio

ns, p

rovi

nce

trend

s, vi

llage

and

yea

r fix

ed e

ffect

s, an

d th

e ad

ditio

nal c

ontro

ls st

ated

in th

e co

lum

n he

adin

gs. S

tand

ard

erro

rs, c

lust

ered

at t

he p

rovi

nce

leve

l, ar

e pr

esen

ted

in p

aren

thes

es. W

ild b

oots

trap

p-va

lues

are

pre

sent

ed in

squa

re b

rack

ets.

The

nu

mbe

r of c

lust

ers a

re st

ated

at t

he b

otto

m o

f the

tabl

e. T

he sa

mpl

es a

re v

illag

e le

vel p

anel

s and

incl

ude

the

year

s 198

6 to

200

5, e

xcep

t for

199

2 an

d 19

94.

Add

ition

al sa

mpl

e ex

clus

ions

are

stat

ed in

col

umn

head

ings

. The

pan

els a

re n

ot fu

lly b

alan

ced

beca

use

of m

issi

ng v

alue

s in

the

depe

nden

t var

iabe

s.

A. D

epen

dent

Var

iabl

e: 5

0th/

90th

Tot

al In

com

e R

atio

B. D

epen

dent

Var

iabl

e: 5

0th/

90th

Agr

icul

tura

l Inc

ome

Rat

io

C. D

epen

dent

Var

iabl

e: 5

0th/

90th

Wag

e In

com

e R

atio

D. D

epen

dent

Var

iabl

e: 5

0th/

90th

Ent

erpr

ise

Inco

me

Rat

io

E. D

epen

dent

Var

iabl

e: 5

0th/

90th

Lan

d

10