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INFORMAL INSTITUTIONS AND LOCAL PUBLIC INVESTMENTS IN RURAL CHINA

Center for Research of Private Economy and School of Economics, Zhejiang University, Zheda Road 38, Hangzhou 310027, P. R. China

E-mail Address: jianglidou@zju.edu.cn

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BING YE

Center for Research of Private Economy and School of Economics, Zhejiang University, Zheda Road 38, Hangzhou 310027, P. R. China

E-mail Address: colinyebing@zju.edu.cn

Corresponding author.

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https://doi.org/10.1142/S0217590817420012Cited by:1 (Source: Crossref)

This article is part of the issue:

Special Issue on Changing Public Finance System: China's Fiscal Reform Towards a Sustainable Economic Development; Guest Editors: Zhikai Wang, Zhejiang University, China and Jinchuan Shi, Zhejiang University, China

Abstract

In this paper, we empirically investigate the impact of informal institutions on local public investment in rural China. We find that lineage groups have a significant effect on local public investment (per capita investment in irrigation, schools, roads, etc.): One clan is good for local public goods investment, while two or more clans in a village have a negative effect. The effect is increasing with the coverage of the largest clan. The evidence on religious groups is mixed.

Keywords:

JEL Classification: H41, H72, Z10, P16

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