Three essays on development economics and political economy

This thesis consists of three essays on development economics and political economy. The first essay is about the political economy of economic reforms in autocracies. I look at how economic liberalization influences the selection of political elites using the data on Chinese Communist Party membership. Many argue that economic liberalization, by reducing the extent to which an autocrat can directly control economic resources, induces democratization. This paper suggests that in post-reform China the composition of the ruling Communist Party membership altered in such a way so as to keep political and economic control aligned. National survey data shows that membership increased more among educated individuals with greater private-sector opportunities. Exploiting exogenous variations in college graduates' labor-market outside options, we find evidence that such a change is mainly driven by the Party's increased demand for educated individuals working in the growing private sector. Such a strategy of co-opting new economic elite could help increase the Party's survival probability and strengthen its commitment to economic reforms. The second essay investigates the impact of introducing village committee elections on the Communist Party's rule. This essay addresses this issue by examining the impact of electoral competition on village cadres' ties with the Party. I focus on two types of ties: village committee chairs' affiliation with Party branch and village cadres' Party membership. Using village and household survey data collected from 48 villages from 1995-2002, I find that introducing competitive elections tended to remove incumbents. Winners are less likely to belong to Party branches. Exploiting exogenous variations in the timing of implementation, I also find evidence suggesting that, although more non-Party members became cadres when competitive elections were first introduced, they are more likely to join the Party later on. It suggests that the Party may accommodate the new political forces by recruitment while elections prompt pluralization of power at village level. The third essay is co-authored with Tao Li. We identify the residential peer effects using data from a Chinese college by exploiting random variations in dorm allocation. We find no evidence of robust residential peer effects. Using the same data we find evidence that females respond to peer influences whereas males do not, consistent with social psychology theories that females are more influenced by peers.