Political trust, risk preferences, and policy support: A study of land-dispossessed villagers in China
Date of Original Version
This paper examines how political trust across local government levels and risk preferences impact individual support to land-taking compensation policies in China. Land expropriation becomes a touchstone for protests and conflict during China's urbanization, driving local governments to diversify land-taking compensation from the traditional one-time lump-sum cash payment to multiple payments, notably, in the form of monthly pension payments and yearly dividends. We found that political trust in the county-level government positively correlates with individual support to pension payments; political distrust in the village collective induces villagers to favor the one-time payment to yearly dividends. Both risk-averse and risk-seeking individuals prefer the one-time cash payment to yearly dividends. The findings are developed using two choice experiments embedded in an original survey: we elicit individual policy support by asking villagers to state their preferences over hypothetical alternative compensation policies; we elicit risk preferences using a lottery-choice experiment with varying probability of winning real monetary rewards. The findings highlight the multi-level local government structure under decentralization and offer insight into to what extent the government efforts in innovative compensation policies are effective at quelling rural anger.
Publication Title, e.g., Journal
Cai, Meina, Pengfei Liu, and Hui Wang. "Political trust, risk preferences, and policy support: A study of land-dispossessed villagers in China." World Development 125, (2020). doi: 10.1016/j.worlddev.2019.104687.