Migration, Participation, and Taxation in Rural China

Abstract

In this paper, I analyze an ordinary form of political participation under an authoritarian regime in rural China. I present a game-theoretic model that reformulates and extends Albert Hirschman’s Exit, Voice, and Loyalty argument to analyze politics in rural China. I explore how rural-to-urban migration and the petition system may strengthen ordinary people’s power vis-a-vis China’s authoritarian regime. My model shows that allowing rural residents to migrate from their local villages and to petition against their local governments would not necessarily give local officials incentives to provide public goods, but would strengthen the central government’s authority to control the local governments. My model’s argument suggests that contrary to Tiebout’s argument, internal migration would not necessarily motivate local governments to provide public goods unless democratic institutions get local officials responsive to popular preferences. Moreover, without further institutionalization of the petition system, this seemingly democratic system would not strengthen villagers’ power vis-a-vis local governments but hurt it.