WIDER seminar: Yao Pan on successful social programmes over local political cycles

At the WIDER seminar on 29 November, Yoa Pan of Aalto University will present her work on successful social programmes in China. A social programme can achieve great success in one case but not in another, and the reason is far from clear. This paper tests a new hypothesis that timing of programme introduction relative to local political cycle greatly affects a programme’s impact, using a government-implemented village fund programme in China. Combining household-level panel data from a random experiment on loan provision and the exogenous variation in the timing of the programme introduction relative to the village Party secretary’s reselection cycle, we show that the programme achieves a higher loan take-up rate, better targeting, fewer violations, and a higher overall performance score if it is introduced in the year prior to reappointment. These divergencies are most likely driven by differences in effort levels the village fund committees put into the programme and in loan terms set by them.