Informal Institutions, Collective Action, and Public Investment in Rural China

Forthcoming, American Political Science Review

MIT Political Science Department Research Paper No. 2014-6

70 Pages Posted: 25 Apr 2014 Last revised: 20 Dec 2014

See all articles by Yiqing Xu

Yiqing Xu

Stanford University

Yang Yao

Peking University - China Center for Economic Research (CCER)

Date Written: December 17, 2014

Abstract

Do informal institutions, rules and norms created and enforced by social groups, promote good local governance in environments of weak democratic or bureaucratic institutions? This question is difficult to answer because of challenges in defining and measuring informal institutions and identifying their causal effects. In the paper, we investigate the effect of lineage groups, one of the most important vehicles of informal institutions in rural China, on local public goods expenditure. Using a panel dataset of 220 Chinese villages from 1986 to 2005, we find that village leaders from the two largest family clans in a village increased local public investment considerably. This association is stronger when the clans appeared to be more cohesive. We also find that clans helped local leaders overcome the collective action problem of financing public goods, but there is little evidence suggesting that they held local leaders accountable.

Keywords: informal institutions, public goods expenditure, collective action, village elections, accountability

Suggested Citation

Xu, Yiqing and Yao, Yang, Informal Institutions, Collective Action, and Public Investment in Rural China (December 17, 2014). Forthcoming, American Political Science Review, MIT Political Science Department Research Paper No. 2014-6, Available at SSRN: https://ssrn.com/abstract=2427983 or http://dx.doi.org/10.2139/ssrn.2427983

Yiqing Xu (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

HOME PAGE: http://yiqingxu.org

Yang Yao

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, 100871
China

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