Convergence of multidimensional poverty in China: does good governance matter?

Abstract

ABSTRACT The existing literature finds the multidimensional poverty may not converge because it usually declines relatively slowly and even shows an upward trend. This paper investigates the convergence of multidimensional poverty and whether good governance could promote it. We examine the impact of good governance on convergence of multidimensional poverty using the matching data of China Family Panel Studies from 2010–2018 with provincial officials. Our results show that the reduction of the multidimensional poverty index is mainly due to a decrease in the multidimensional headcount ratio (H), which decreases more in provinces with higher initial H. However, the speed of convergence varies among provinces and cannot be explained by unconditional convergence alone. Such variation is explained by promotion incentives of officials and fiscal expenditure, specifically, the H tends to decrease faster in provinces with stronger promotion incentives and more fiscal expenditure. Our findings would provide implications for China’s future anti-poverty policies and poverty alleviation work in other developing countries.