Essays on the Political Economy of Development

This thesis consists of three chapters on the political economy of development. The regional focus is on China, but the issues studied are widespread around the world. In Chapter 1, I study the manipulation of economic statistics by government officials. Leveraging a unique reform in China, I show that a combination of top-down monitoring and punishment could effectively reduce such manipulation; furthermore, reducing such manipulation could elicit officials’ effort in developing the economy, as manifested in both policy changes and downstream impacts. In Chapter 2, I focus on agricultural fires, a major source of air pollution in the rural areas induced by farmers burning crop residues after harvest. I show that providing economic incentives to farmers could effectively reduce such burnings, while a command-and-control that merely forbids such burnings fails to do so. This work has been published in the Journal of Development Economics (March 2023). In Chapter 3, joint with Chunyang Wang (Peking University), we examine a widespread practice of interregional rotation of local officials in China, whose initial purpose is to curb corruption. We document an interesting pattern of “go with the politician”: firms follow politicians’ move to purchase land in the politicians’ new constituents, with cheaper prices but lower land usage efficiency after purchase. This pattern thus indicates the continuation of corruption after such rotation. This work has been published in the American Economic Journal: Economic Policy (May 2023).