Village Elections, Communist Party Oversight and Public Spending in Rural China

Abstract: What impact does the introduction of voting for village committee in China have on the allocation of local public funds? Does that effect vary with local Communist Party's role in elections? I examine these questions for a sample of 241 villages from 1987 – 2002. Employing a differences-in-differences approach with village fixed effects, I find that introduction of elections increased the probability of yearly village-funded public goods investments by 36%, increased village-to-household transfers by 16%. However, when a Party branch member won the election as village committee chair the probability of public goods investment increased only 28% and village-to-household transfers were essentially no different from those in villages without elections. While the consent of the Party branch is necessary for the village committee to make these allocations, controls by the Party are greater when its local branch member is elected as village chair. Committee chairs who were also Party branch members were more likely to be re-elected subsequently than others. The results suggest that Party oversight reduces the effect of holding village elections.