Creating Wealth and Welfare

Abstract

Summaries This article examines the role of China's rural township and village governments in welfare provision. In it, I first describe the role of local officials in the promotion of collective and private enterprise, and the relationship between these entrepreneurial activities and more traditional responsibilities of government, particularly social assistance and welfare provision. The extraordinary development of China's township and village enterprises created resources which have frequently been channelled towards the provision of public goods and welfare. Examination of policy changes and budget allocations for rural welfare highlights the extent to which localities are dependent on their own funding sources. In conclusion, I suggest that new initiatives in fiscal reform may limit the entrepreneurial capacity of local governments, reducing their control over resources and thus their capacity to meet welfare responsibilities.