Grass-root Election and Public Goods Supply of Local Government: Evidence from Rural China

Grass-root election is an important path for villagers to participate in village democratic politics and governance. Recent research shows that grass-root election can increase the public goods supply of local government, but they didn't explain the hidden driving factors and influencing mechanism. This paper propose a hypothesis based on Local Fiscal Expenditure theory, that is, the villagers participate in grass-root election stimulated by heterogeneous demand for local public goods will increase local public goods supply; in the meanwhile, the elected village cadres which stands for local government will respond to voter's heterogeneous demand and make different decision to satisfy their different public goods demand. Using Chinese rural survey data of 399 villages, this paper build the simultaneous equations model (SEM) to test this hypothesis and then finds that voter's demand for village schools, clinics, and water facilities increase the supply of these local public goods respectively. This result helps us to understand the effect of grass-root election on local public goods supply, and also provides an important basis of related public policies formulation in rural China.