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Political Control and Economic Inequality: Evidence from Chinese Cities

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  • Zhang, Muyang
  • Zhou, Guangsu
  • Fan, Gang

Abstract

This paper explores the consequence of political control on intra-city economic inequality. Utilizing the unique political institution with mass cadre transfers and household survey data from 81 Chinese cities in 2010, 2012, and 2014, we find that cities with a “local” leader enjoy an almost 6% reduction in expenditure inequality, and the gap is especially narrowed in the lower income families. The reduction is attributed to larger amount of targeted transfers to low-income households. This paper is among the first to empirically support the argument supporting local residence duration for office holding in public sectors, and also contributes to understanding the political economy of social welfare programs as well as campaigns in inequality reduction.

Suggested Citation

  • Zhang, Muyang & Zhou, Guangsu & Fan, Gang, 2020. "Political Control and Economic Inequality: Evidence from Chinese Cities," China Economic Review, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:chieco:v:61:y:2020:i:c:s1043951x19300173
    DOI: 10.1016/j.chieco.2019.01.011
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    More about this item

    Keywords

    Political control; Cadre transfers; Economic inequality; Targeted transfer;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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