Local Elections and Consumption Insurance : Evidence from Chinese Villages

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.

Bibliographic Details

Main Authors:	Gan, Li, Xu, Lixin Colin, Yao, Yang
Language:	English
Published:	World Bank, Washington, DC 2007-04
Subjects:	ADMINISTRATIVE COSTS, AGRICULTURE, ANNUAL GROWTH, ANNUAL GROWTH RATE, AVERAGE ANNUAL, AVERAGE INCOME, BUDGET CONSTRAINT, CONSUMPTION GROWTH, CONSUMPTION INSURANCE, CONSUMPTION LEVELS, CONSUMPTION SMOOTHING, CREDIT MARKET, CROSS SECTION UNIT, DATA SET, DECENTRALIZATION, DEMAND FOR CONSUMPTION, DETERMINANTS OF CONSUMPTION, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, ECONOMETRICS, ECONOMIC ANALYSIS, ECONOMIC DEVELOPMENT, ECONOMIC EFFECTS, ECONOMIC OUTCOMES, ECONOMIC PERSPECTIVES, ECONOMIC REVIEW, EMPIRICAL ISSUE, EMPIRICAL RESULTS, EXPLANATORY POWER, EXPLANATORY VARIABLE, FARMERS, FUNCTIONAL FORM, FUTURE RESEARCH, GDP, GDP PER CAPITA, GOVERNMENT REGULATIONS, GROWTH EQUATION, HOUSEHOLD CHARACTERISTICS, HOUSEHOLD CONSUMPTION, HOUSEHOLD CONTROLS, HOUSEHOLD DATA, HOUSEHOLD HEAD, HOUSEHOLD HEADS, HOUSEHOLD INCOME, HOUSEHOLD MEMBERS, HOUSEHOLD SIZE, HOUSEHOLD SIZES, IDIOSYNCRATIC SHOCKS, IMPLICATIONS FOR CONSUMPTION, INCOME, INCOME GROUPS, INCOME GROWTH, INCOME LEVEL, INCOME SHOCKS, INCOME SMOOTHING, INCOMES, INFORMAL INSURANCE, LEVELS OF CONSUMPTION, MEASUREMENT ERRORS, MEDIAN VOTER, MEDIAN VOTER THEOREM, MEDIAN VOTERS, MIDDLE CLASS, NEGATIVE EXTERNALITY, 0 HYPOTHESIS, OPTIMIZATION, POLICY IMPLICATIONS, POLICY RESEARCH, POLITICAL ECONOMY, POOR, POOR FARMERS, POSITIVE EFFECT, POVERTY REDUCTION, PUBLIC CHOICE, PUBLIC ECONOMICS, PUBLIC EXPENDITURE, PUBLIC EXPENDITURES, PUBLIC GOODS, REDUCING POVERTY, REDUCTION IN CONSUMPTION, RISK AVERSION, RISK SHARING, RURAL, RURAL AREAS, RURAL CREDIT, RURAL ECONOMY, RURAL HOUSEHOLD, RURAL HOUSEHOLDS, RURAL RESIDENTS, SAVINGS, SIGNIFICANCE LEVEL, TAXATION, TOTAL INCOME, UTILITY FUNCTION, VILLAGE LEADERS, WEALTH,
Online Access:	http://documents.worldbank.org/curated/en/2007/04/7537736/local-elections-consumption-insurance-evidence-chinese-villages https://hdl.handle.net/10986/7064
Tags:	Add Tag No Tags, Be the first to tag this record!