Can relationship bring more provision in rural public goods? Empirical evidence from rural China

Purpose - The purpose of this paper is to investigate how different types of the village relationship influence different types of public goods provision in rural China. Design/methodology/approach - The three components (clan-based relationship, neighborhood relationship and external relationship) were derived by employing factor analysis. The simultaneous discrete choice model was used to estimate the influence of these components on public goods provision, using the survey data from the China Household Income Project conducted in 2007. Findings - The findings indicate that considering different components of village relationship allows for a better understanding of the public good provision. The results indicate that the neighborhood relationship has a significantly positive effect on rural public goods provision, particularly on water conservancy and irrigation, while the external relationship has a significantly positive effect on all types of public goods. Practical implications - Local public goods provision is the core of the new rural construction in China. These findings imply that relationship in villages plays a vital role in the provision of public goods and is necessary in the construction of the new harmonious countryside in China. The results also have implications for rural public goods provision in other developing countries. Originality/value - To the best of our knowledge, this is the first study to quantitatively model the impact of different relationships on public goods provision at the rural level. A consideration of the different components in village relationship allows for a more precise understanding of the pubic goods provision in the village.