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Local Elections and Consumption Insurance: Evidence from Chinese Villages

28 Pages Posted: 20 Apr 2016  

Li Gan

Texas A&M University - Department of Economics; National Bureau of Economic Research (NBER)

Lixin Colin Xu

World Bank - Development Research Group (DECRG)

Yang Yao

Peking University - China Center for Economic Research (CCER)

Date Written: April 1, 2007

Abstract

While the literature on consumption insurance is growing fast, little research has been conducted on how rural consumption insurance is affected by democracy. In this paper the authors examine how consumption insurance of Chinese rural residents is affected if the local leader is democratically elected. Exploring a unique panel data set of 1,400 households from 1987 to 2002, they find that consumption insurance is more complete when the households are in villages with elected village leaders. Furthermore, democracy improves consumption insurance only for the poor and middle-income farmers, but not for the rich. These findings underline the importance of democratic governance for ensuring better rural consumption insurance and poverty reduction.

Keywords: Rural Poverty Reduction, Consumption, Inequality, Services & Transfers to Poor, Economic Theory & Research

Suggested Citation

Gan, Li and Xu, Lixin Colin and Yao, Yang, Local Elections and Consumption Insurance: Evidence from Chinese Villages (April 1, 2007). World Bank Policy Research Working Paper No. 4205. Available at SSRN: https://ssrn.com/abstract=980823

Li Gan (Contact Author)

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Lixin Colin Xu

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
MC 3-427
Washington, DC 20433
United States
202-473-4664 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/cxu

Yang Yao

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

Beijing, 100871
China

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