The Politics of Public Goods Provision in Rural China

Abstract

The provision of rural public goods in China heavily relied on fiscal revenue of local governments. Although the central government had increased the investment on the rural area construction, the situation of rural public goods provision still remained unsatisfactory in villages dominated by agriculture. Not all public goods were under-provided however. This paper argues that the different outcomes of various public goods depended on government policies. Public infrastructure projects were classified into three categories. Public goods under government?s responsibility with clear policies are often successfully provided. Public goods that fall under the category of government?s responsibility without clear policies will fail to be provided unless either guanxi exists, or the project promotes local government?s achievements. Those provided by villages without government?s responsibility, mostly fail to be provided unless these projects are within the affordability of farmers and to avoid free-rider problem, or entrepreneurs donates heavily.