Download or read book Informal Institutions, Collective Action, and Public Investment in Rural China written by Yiqing Xu and published by . This book was released on 2014 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do informal institutions, rules and norms created and enforced by social groups, promote good local governance in environments of weak democratic or bureaucratic institutions? This question is difficult to answer because of challenges in defining and measuring informal institutions and identifying their causal effects. In the paper, we investigate the effect of lineage groups, one of the most important vehicles of informal institutions in rural China, on local public goods expenditure. Using a panel dataset of 220 Chinese villages from 1986 to 2005, we find that village leaders from the two largest family clans in a village increased local public investment considerably. This association is stronger when the clans appeared to be more cohesive. We also find that clans helped local leaders overcome the collective action problem of financing public goods, but there is little evidence suggesting that they held local leaders accountable.