Local Elites and Public Good Provision : Evidence From the Rise of Public Education in the Early 20th Century China

Do social elites facilitate public good provision? Public primary education in China only started after 1905, and it expanded rapidly in the following three decades. This paper studies the infancy stage of the public education system in China and focuses specifically on the role of its most important local elite group — lower degree holders under the civil service exam system. I construct a new county-level dataset linking local elites to public education provision. I find counties that had larger elite groups built significantly more public primary schools and spent higher expenditure on education. This finding is robust to various checks, including two IV approaches. Furthermore, the positive effect of local elites was larger in counties with the weaker formal ruling, proxied by both high frequent turnover of local magistrates and distance to provincial capital. These results suggest that the informal governance imposed by local elites was critically important for the provision of public goods, especially in societies where the formal ruling was weak