3 - LOCAL GOVERNMENTAL PERFORMANCE

Summary

Given the multitude of problems with local public finance and governmental accountability discussed in the last chapter, it is not surprising that the provision of local public goods and services is a major problem. Reliable aggregate data are scarce, but available statistics suggest that the level of public goods provision in China is low even compared to other developing countries. The total size of China's road network in 2002, for example, as estimated by the World Bank, was 1.7 million kilometers, roughly the same as that of Brazil. In China, however, this network served a territory of 9.6 million square kilometers, an area 13 percent larger than Brazil's 8.5 million square kilometers, and a population of 1.3 billion people, more than seven times the size of Brazil's population. Investment in education was comparatively low – about 2.1 percent of GDP in 2000 compared to 4.3 percent in Brazil, 4.1 percent in India, and 3.8 percent in Russia. Access to water “improved” for drinking was similarly problematic: as of 2002, 23 percent of China's population lacked access to improved water, as opposed to 14 percent in India and 11 percent in Brazil.

This book focuses on the provision of rural roads, schools, and water for a couple of reasons. First, these three categories of public goods have a profound impact on the quality of life everywhere and are the ones that villagers in China most often need and demand.