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Growth Of Villages In China, 1990-2002

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Executive Summary

This paper examines the economic and noneconomic determinants of growth disparity among Chinese villages between 1990 and 2002. By estimating a growth equation, first, the authors confirm a significant positive effect of the initial level of human capital, as well as the initial condition of physical infrastructure. Second, social capital measured by the degree of stable social relations at the village level is also a significant growth-promoting factor. The policy implications of the findings are that public policy promoting social stability in rural areas should be strengthened, as well as increasing financial support for rural education and infrastructure construction, especially in lower income regions.

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