Doctoral Dissertation Research in Economics: Informal exchange and political power

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This study examines the private benefits enjoyed by political leaders of small jurisdictions in rural China, and the effect of democracy on these benefits. Village leaders in poor settings are often "big shots;" their position affords them social status, kickbacks and other gifts from citizens, the value of which may be large in aggregate. The extent to which democracy can mitigate these private gains by making leaders accountable to citizens is of great interest.This study examines the effects of local democracy by constructing a unique data set on social networks in Chinese villages. In the studied villages, major life events (births, weddings and funerals) are commemorated by large gatherings where gifts are exchanged, and their content is recorded in an account book held by the family. The research project digitizes these account books, spanning gifts given over the last 40 years, and reconstructs the history of the village social and gift network from them. Such detailed, accurate data on historical gift transfers in a poor setting, including to and from village leaders, is very rare to find.The main contribution of the research is to examine the effect of a democratic transition on informal authority. China instituted local elections in all villages between 1985 and 1995. By analyzing data on gifts received and given by politicians and leaders, it is possible to identify the effect of more democratic institutions on the informal power of village authorities. If the democratic transition creates a genuine shift in the source of authority of village leaders (from Communist Party to the citizens of the village), the flow of gifts to leaders should diminish, and leaders should reciprocate gifts further. The study tests whether local democratic institutions are successful in transferring some of leaders' informal power to citizens.In addition, the detailed gift record will allow an in-depth examination of the institutions of reciprocity and gift exchange in a poor rural setting.