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Informal Institutions, Collective Action, and Public Investment in Rural China[*]
Yiqing Xu[†] Yang Yao[‡]
forthcoming at American Political Science Review
Accepted: December17, 2014
No. E2014001 April 23, 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 the 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 loal 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.
Key Words: informal institutions, public goods expenditure, collective action, village elections, accountability
[*]The authors are indebted to Tim Besley, Fotini Chirstia, Danny Hidalgo, Dan Mattingly, Rich Nielson, Jean Oi, Nancy Qian, Mike Sances, Jim Snyder, Lily Tsai, Jeremy Wallace, Haixiao Wang, and Teppei Yamamoto, as well as seminar participants at Peking University, University of Wisconsin-Madison, Massachusetts Institute of Technology, Harvard University, International Food Policy Research Institute, the 2014 annual conference of the Midwest Political Science Association, for helpful discussions and comments.
[†]Ph.D Candidate,Department of Political Science, Massachusetts Institute of Technology, email: xyq@mit.edu.
[‡]Professor, National School of Development and China Center for Economic Research, Peking University, email: yyao@nsd.pku.edu.cn
