Abstract:Do informal institutions promote good local governance in environments of weak democratic or bureaucratic institutions? This question is difficult to answer because of the challenges of defining informal institutions, measuring them, and identifying their effects. This paper attempts to address those challenges. We focus on informal institutions -- the rules created and enforced by social groups -- that could possibly facilitate local public goods provision and explore two mechanisms: (1) informal institutions help local leaders overcome the collective action problem of financing public goods and (2) informal institutions hold local officials accountable by providing extra incentives or better monitoring. Using a panel dataset of 220 Chinese villages from 1986 to 2005, we find that local public goods expenditure increases considerably when an elected village chairperson comes from the two largest family clans in a village and the association is stronger when clans appear to be more cohesive. We interpret these results as evidence that informal institutions of large clans facilitate local public goods provision. In addition, we show that the collective action mechanism is more plausible than the accountability mechanism in the context of rural China. Our finding is robust to alternative explanations, such as more capable leaders, changes of formal electoral rules, and strategic co-optation of the Chinese Communist Party.
Abstract: This study provides novel and rigorous empirical evidence that informal institutions are important for determining the performance of formal ones in the context rural China. We collect a large survey to document village temples, which are inclusive voluntary organizations, and the introduction of village-level elections. We find that temples enhance the positive effect of elections on increasing village-government provided public goods.
Abstract: Why would an authoritarian regime set up deliberative institutions to allow people to complain publicly if, as is often presumed, complaints facilitate protests and cause social instability? We argue that deliberation is a process of hierarchical communication not only between the government and the citizens, but also among the citizens. We show that deliberation serves two functions. First, it helps the government respond to fluctuating public opinion. Second, it can also help to reshape the citizens' beliefs. Specifically, deliberation disorganizes citizens if they find themselves split over government policies. However, if deliberation reveals that a protest can be successful, the government identifies the danger, and improves the policy to appease the opposition. When the citizens are perceived to be sufficiently homogeneous, deliberation is allowed. We further investigate two deliberative mechanisms that combine a private poll with either a committed responsiveness or a censorship strategy. To achieve the best possible payoff in both mechanisms, the government needs to constrain itself from over-manipulating citizens' learning, thus amplifying the disorganization effect.
"Outspoken Insiders: Who Complains About the Government in Authoritarian China?" (with Lily L. Tsai) Abstract
Abstract: When are individuals more likely to complain about local government performance in nondemocratic and transitional systems such as China? We propose that formal and informal political connections constitute an important resource for political action in nondemocratic or single-party systems. Empirically we find that, in both rural and urban China, Insiders who are formal party members or who have informal family ties to higher-level officials complain more. This because they enjoy privileged access to decision makers and information as well as political credentials that may make authorities view them as less threatening and provide them with political protection. Insiders are thus likely to find complaining about government performance less costly and less risky.
"Why Do More Educated People Complain More? Evidence from Chinese Provincial Capitals"
"The Voice of Migrants: Public Consciousness and Political Participation" (with Ming Lu and Zhao Chen)
"Connections Pay Off: Political Visits and Bank Loans in the Crisis" (with Yunxia Bai and Ninghua Zhong) Abstract
Abstract:This paper illustrates how political connections can help firms in extremely difficult times. We collect a unique dataset of news reports of government officials' interactions with 871 listed firms in the Chinese stock market. Political connections are measured by officials' visits to firm headquarters. We show that firms with connections received significantly more bank loans when the 2008 global financial crisis hit China. The higher the level of officials, the stronger the effect. The result stands firm in front of alternative explanations, including firm size and performance, the government's strategies, and its monetary and unemployment concerns.
Work in Progress
"The Grand Canal, Communism, and Modern Economic Performance: A Study on the Persistence of Economic Activity in China, 1000-2012 A.D." (with Nancy Qian)
"The Emergence of Chinese Urban System: Courier Routes and Population Divergence, 1500-2010" (with Ming Lu).
"Does Intra-Party Democracy Ever Exist in China?" (with Yasheng Huang)