Does Rural Elections Increase Villagers' Happiness?

By using individual,household and village survey data from the Chinese Household Income Project,this paper examines how an important reform of local governance—village election—in the world's most populous areas has affected the happiness of the residents in rural China.Different from the previous literature by constructing the democracy index,we explore how different process of election affects subject well-being.For the endogenous problem,we find a set of instrumental variables which satisfy both relevance and exogeneity.Empirical results show whether or not the villages have implemented elections has no significant impacts on the happiness of local residents,and people in the villages where cadres were nominated and elected directly by villagers tend to exhibit a higher level of happiness.This implies introducing election itself does not necessarily increase the happiness of the residents,instead,it appears to be more relevant on how exactly the mechanism is structured.Furthermore,we investigate the channels through which the village election has exerted its impacts on the happiness of the residents at both individual and village levels.In particular,we find evidence that direct nomination of cadres(i)improves individuals' trust on the "benevolent"behaviors of the elected cadres;(ii)improves the accountability of the elected cadres in the sense that they tend to pay more attention to balancing the different interests of the villagers and tend to spend more on welfare expenditure.All these channels contribute to the happiness-improving effect of direct nomination in rural elections.