Infrastructure Spending in China Increases Trust in Local Government

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.

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Notes

  1. 1.

    Source: China Statistical Yearbook 2013.

  2. 2.

    http://www.asianbarometer.org/.

  3. 3.

    Section 2 describes these controls in detail.

  4. 4.

    Education is reported on a scale from 2 to 10. 40.74 % of the sample report education at level 4 or below, and 72.78 % report education at level 5 or below. The dummy is 1 for people reporting education level 5 or higher.

  5. 5.

    Since trust is itself a subjective variable, a case can be made for preferring a subjective measure of income in a model of trust even if an objective one were available.

  6. 6.

    Source: The China Statistical Yearbook, 2014, Tables 12.

  7. 7.

    The relevant table is available at http://data.stats.gov.cn/easyquery.htm?cn=C01&zb=A0P06&sj=2014. Accessed date: 10/11/2015.

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Correspondence to Guy Mayraz.

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The authors declare that they have no conflict of interest.

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We would like to thank seminar participants at Monash University, International Conference on Public Policy (Milan 2015), and the Chinese Economic Society of Australia (CESA) conference in Beijing (2014) for their comments. Guy Mayraz would like thank the Canadian Institute for Advanced Research (CIFAR) for funding support.

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Li, B., Mayraz, G. Infrastructure Spending in China Increases Trust in Local Government. Soc Indic Res 132, 341–356 (2017). https://doi.org/10.1007/s11205-015-1223-z

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Keywords

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

JEL Classification

  • E62
  • H41
  • H54
  • I3
  • O53
  • P25
  • R5