How Natural Resources Affect Authoritarian Leaders’ Provision of Public Services: Evidence from China

Abstract

This article examines the effects of natural resource extraction on authoritarian governments’ provision of public services, using subnational data from China. Facing no electoral constraint that would reflect the policy preferences of citizens, Chinese local leaders instead allocate public funds differentially based on their need for quality labor in local economic development, a critical criterion for their political success. When the local economy benefits from natural resources, the need for skilled local labor dissipates, and leaders invest less in social services that enhance labor productivity. Using panel data across all prefecture-level cities (1992–2010), I find evidence that mineral resource abundance leads local governments to provide fewer public services for education and health care. Meanwhile, services unrelated to labor quality remain unaffected. The results are robust to the inclusion of key confounding factors such as FDI inflows and state-owned enterprises’ output contributions. Additi...