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Local elections and consumption insurance : evidence from Chinese villages

Author

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  • Li Gan
  • Lixin Colin Xu
  • Yang Yao

Abstract

While the literature on consumption insurance is growing fast, little research has been conducted on how rural consumption insurance is affected by democracy. In this paper the authors examine how consumption insurance of Chinese rural residents is affected if the local leader is democratically elected. Exploring a unique panel data set of 1,400 households from 1987 to 2002, they find that consumption insurance is more complete when the households are in villages with elected village leaders. Furthermore, democracy improves consumption insurance only for the poor and middle-income farmers, but not for the rich. These findings underline the importance of democratic governance for ensuring better rural consumption insurance and poverty reduction.

Suggested Citation

  • Li Gan & Lixin Colin Xu & Yang Yao, 2007. "Local elections and consumption insurance : evidence from Chinese villages," Policy Research Working Paper Series 4205, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4205
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    Citations

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    Cited by:

    1. Yang Yao & Nancy Qia & Monica Martinez Bravo & Gerard Padro i Miquel, 2011. "Do Local Elections in Non-Democracies Increase Accountability? Evidence from Rural China," Working Papers id:3931, eSocialSciences.
    2. Monica Martinez-Bravo & Gerard Padró I Miquel & Nancy Qian & Yang Yao, 2017. "The Rise and Fall of Local Elections in China: Theory and Empirical Evidence on the Autocrat's Trade-off," NBER Working Papers 24032, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Rural Poverty Reduction; Consumption; Inequality; Services&Transfers to Poor; Economic Theory&Research;
    All these keywords.

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