Unlike performance incentives for private sector managers, little is known about performance incentives for managers in public sector bureaucracies. Through a randomized trial in rural China, we study performance incentives rewarding school administrators for reducing student anemia -- as well as complementarity between incentives and orthogonally assigned discretionary resources. Large (but not small) incentives and unrestricted grants both reduced anemia, but incentives were more cost-effective. Although unrestricted grants and small incentives do not interact, grants fully crowd-out the effect of larger incentives. Our findings suggest that performance incentives can be effective in bureaucratic environments, but they are not complementary to discretionary resources. 

A recently developed small area estimation technique is used to geographically derive detailed estimates of consumption-based poverty and inequality in rural Shaanxi, China. These estimates may be helpful for targeting since there is wide variability in poverty rates within Shaanxi but low levels of inequality within most counties and townships. We also investigate whether including environmental variables in the equation used to predict consumption and poverty improves upon typical approaches that only use household survey and census data. Ignoring environmental variables appears likely to produce targeting errors.

Using rural household panel data from three Chinese provinces, this paper identifies determinants of long-term poverty and tests the duration dependence on the probability to leave poverty. Special emphasis is given to the selection of the poverty line and inter-regional differences across provinces. Results suggest that the majority of population seems to be only temporary poor. However, the probability to leave poverty for those who were poor is differently affected by poverty duration across provinces ranging from no duration dependence in Zhejiang to highly significant duration dependence in Yunnan. The number of nonworking family members, education, and several village characteristics seem to be the most important covariates.

In contrast to its decentralized political economy model of the 1980s, China took a surprising turn towards recentralization in the mid-1990s. Its fiscal centralization, starting with the 1994 tax reforms, is well known, but political recentralization also has been under way to control cadres directly at township and village levels. Little-noticed measures designed to tighten administrative and fiscal regulation began to be implemented during approximately the same period in the mid-1990s. Over time these measures have succeeded in hollowing out the power of village and township cadres. The increasing reach of the central state is the direct result of explicit state policies that have taken power over economic resources that were once under the control of village and township cadres. This article examines the broad shift towards recentralization by examining the fiscal and political consequences of these policies at the village and township levels. Evidence for this shift comes from new survey data on village-level investments, administrative regulation and fiscal oversight, as well as township-level fiscal revenues, expenditures, transfers (between counties and townships) and public-goods investments.

Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level public administration. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre. Given the increasing return to non-agricultural employment since China’s economic reforms began, it is not surprising that the return to working as a village cadre has also increased over time. Returns to cadre-status (such as they are) are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in offfarm employment from businesses and economic activities managed by villages

This contribution documents the effect ofthe global financial crisis on women's off-farm employment in China's rural labor force. It begins by comparing the difference between the actual off-farm employment rate and the offfarm employment rate under the assumption of "business as usual" (BAU - a counterfactual of what off-farm employment would have been in the absence of the crisis). The study also examines how the impact of the financial crisis hit different segments of the rural off-farm labor market. Using a primary dataset, the study found that the global financial crisis affected women workers. By April 2009, there was a 5.3 percentage point difference between off-farm employment under BAU and actual off-farm employment for women, and the monthly wages of women declined. Most of this impact affected migrant wage earners; however, the impact did not fall disproportionately on women. The recovery of women's employment was as fast as that of men's employment

When seeking to build high quality and cost-effective infrastructure in rural villages, a fundamental question is: Who is better at doing so? Should the village leadership or a government agency above the village finance and/or manage the construction of the infrastructure project? To answer this question, we surveyed all rural road projects in 101 villages in rural China between 2003 and 2007 and measured the quality and per kilometer cost of each road. According to our analysis, road quality was higher when more of the project funds came from the government agency above. Moreover, projects had lower cost per kilometer when the village leaders managed the road construction. Overall, our findings suggest that to build high quality and cost-effective rural roads village leaders and government agencies should collaborate and each specialize in a specific project role.

China’s 2010 census revealed a population of 1.34 billion, 50 percent urban, 13.3 percent above age sixty, and with 118.06 boys born for every 100 girls. In this article, we discuss how gender imbalance, population aging, and their interaction with rapid urbanization have shaped China’s reform era development and will strongly shape China’s future. These intertwined demographic changes pose an unprecedented challenge to social and economic governance, contributing to and magnifying the effects of a slower rate of economic growth. We organize the analysis according to the proximate determinants of economic growth: first, labor input and its productivity; second, capital investment and savings; and finally, multi-factor productivity, including social stability and governance. We argue that the economic, political, and social context that turns labor and capital inputs into economic outputs is perhaps the most important and least understood arena in which demographic change will shape China’s rise.

This study estimates the impact of road expansion on off-farm activities in rural China. To achieve this goal, econometric models that capture the impact of road expansion on migration and local off-farm works are developed and estimated using individual data. Estimation results show that road expansion encourages farmers to participate in local off-farm work rather than migrate. In addition, road expansion also has a significant impact on the working time and income of local off-farm work.

Policymakers in many developing countries regard upper-secondary technical and vocational education and training (TVET) as a key element in economic growth and poverty reduction. Unfortunately, there is evidence that upper-secondary TVET programs in developing countries experience high rates of dropout. The overall goal of this study is to examine the dropout rates and reasons for dropout among uppersecondary TVET students in China. To meet this goal, we have three specific objectives. First, we seek to produce high-quality estimates of dropout rates among students in upper-secondary TVET schools in one coastal and one inland province of China. Second, we seek to identify which students drop out from upper-secondary TVET. Third, we test whether financial constraints, math and computer achievement, and parental education and migration status correlate with TVET dropout. Drawing on data from a survey of 7414 upper-secondary TVET students in two provinces of China, we find dropout rates of 10.7% across both provinces and as high as 22% in poorer inland areas, suggesting major gaps and disparities in Chinese TVET dropout rates. Furthermore, we find that baseline academic performance and maternal education and migration status are strong correlates for student dropout.