Does Supervision Down to the Countryside Level Benefit Rural Public Goods Supply? Evidence on the Extent of Households’ Satisfaction with Public Goods from 2005 to 2019

Abstract

This paper mainly studies the effect of village-level power supervision reform on the rural supply of public goods. In this paper, the panel data of 100 villages in five provinces of China from 2005 to 2019 are used to identify and analyze the impact of the supervision policy on the supply of rural public goods. The study adopted PSM-DID as the identification strategy to alleviate the endogenous problem of the model; it found that the supervision policy significantly improved the supply of public goods in villages, and increased the satisfaction of villagers with the village economic base and public social services. There is regional heterogeneity in the improvement effect of policy on public goods supply, which mainly reflects the regions with weak economic development. This policy mainly promotes the optimization of public goods supply by strengthening villagers’ public participation, and promoting the improvement of the current situation of public goods by restraining village cadres’ duty behaviors. It is also found that the coupling of clan power and village formal authority can inhibit the positive effects brought by the policy, and only in areas with strong clan power can the negative effects be mitigated. Moreover, there is an alternative relationship between the assessment pressure of village cadres and the supervision force sent to the countryside, which will form a situation of excessive supervision and inhibit the optimization of village public goods. The conclusion of this paper provides empirical support for the view that “top-down external institutional supervision and bottom-up internal democratic supervision should be effectively integrated” in the theory of village power supervision.