The Neighbor Effects of Provision of Public Goods Among Chinese Villages by Philip H. Brown

As a development economist, much of my research has focused on better understanding poverty and inequality in countries such as Chile and China. Working on areas such as health, education, environmental protection, and public goods provision, my work aims to identify hurdles in the fight against poverty and to propose implementable public policies. One recent study is entitled “Neighbor Effects in the Provision of Public Goods in a Young Democracy: Evidence from China.” This project seeks to answer whether higher spending on public goods in neighboring areas is associated with higher spending on public goods at home and whether any such effect is related to nascent elections in Chinese villages. This study is unique in that it examines neighbor effects in an emerging democracy. While yardstick competition and fiscal mimicking have long been observed in developed countries with democratic traditions firmly in place, there is scant empirical evidence regarding young and developing democracies.

In undertaking our research, we looked closely at 86 rural Chinese administrative villages that have undergone democratic transitions in the past 20 years. We find that incumbent chairs of village committees (who are elected) are spurred on by public works projects in neighboring villages to initiate their own projects while incumbent secretaries of the local Communist Party branch (who are appointed) are not influenced by spending in neighboring villages, suggesting that democracy underlies neighbor effects. Expansion of local elections to townships and other higher levels of government may thus result in an increase in competition among village officials, leading to greater accountability to constituents. A working version of this paper was published in the International Food Policy Research Institute’s discussion paper series in September, 2010.

About the author: With a PhD in Economics from the University of Michigan, Philip H. Brown makes extensive use of econometrics and empirical methods in his research on poverty and poverty alleviation in the developing world. Phil Brown’s academic papers are accessible at www.philbrown.me.