Infrastructure Spending in China Increases Trust in Local Government

Article

DOI: 10.1007/s11205-015-1223-z

Cite this article as:
Li, B. & Mayraz, G. Soc Indic Res (2016). doi:10.1007/s11205-015-1223-z

Abstract

Following the 2008/9 financial crisis, China instituted a 4 trillion RMB stimulus package that was spent mostly on infrastructure, with a particular impact at local level. The goal was to sustain economic growth and preserve social stability. We use the Asian Barometer surveys from shortly before and after the stimulus to examine its impact on public trust in government, and find a reversal of a previous downward trend and a substantial increase in trust in local government post stimulus. We consider a number of alternative explanations for this increase in trust, and conclude that the stimulus package is the most convincing explanation. Both perceptions of corruption and experience of corruption increased over the stimulus period. Given the strong negative correlation between corruption and trust, this implies that trust would have increased even further if the level of corruption had remained the same.

Keywords

Financial crisis Stimulus package Public spending Social stability Trust in government China Infrastructure 

JEL Classification

E62 H41 H54 I3 O53 P25 R5 

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Crawford School of Public Policy, College of Asia and PacificAustralian National UniversityCanberraAustralia
  2. 2.Department of Economics, Faculty of Business and EconomicsUniversity of MelbourneCarltonAustralia