Politics, Growth, and Inequality in Rural China: Does it Pay to Join the Party?
New York University (NYU) - Robert F. Wagner Graduate School of Public Service; New York University (NYU) - Department of Economics
University of Western Ontario - Department of Economics
Journal of Public Economics, Vol. 77, No. 3, September 2000
Economic reform is often constrained because rank-and-file bureaucrats responsible for implementation have vested interests that oppose change. Drawing on an unusual longitudinal survey data set for a representative rural county in northern China, we show an alternative, positive scenario consistent with the presence of an implicit, performance-based incentive contract that ties the household incomes of local officials to market liberalization, increases in consumer demand, and the provision of local public goods. The mechanisms appear to be tolerated as the fruits of growth are shared fairly equitably, thus allowing implementation of a politically and economically self-reinforcing reform process.
Keywords: Economic transition; China; Political economy; Inequality; Rural reform
JEL Classification: P21, P26, D31Accepted Paper Series
Date posted: March 28, 2001
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo2 in 0.375 seconds