Does The Establishment Of National Poverty-stricken Counties Promote Local Economic Development?

The establishment of national poverty-stricken counties is a long-standing policy for China's poverty reduction campaign.According to the economic statistics of the past years,it is not difficult to find that the poverty alleviation and development policies targeted at the national poverty-stricken counties have achieved remarkable results.This paper reviews the literature on poverty types,poverty standards,causes of poverty,ways to reduce poverty,and so on.However,no consensus exists in the literature on whether the establishment of national poverty-stricken counties has promoted local economic development,and the literature on this issue often used the single-difference method,which directly compares the economy performance of national povertystricken counties before and after the policy shock to make judgments,this method can not accurately identify the net impact of the establishment of national poverty-stricken counties on local economic development.Unlike single-difference method used in previous studies,this paper uses the PSM-DID method to study the impact of the establishment of national poverty-stricken counties on local economic development.Specifically,this paper uses the adjustment of the national povertystricken counties in 2012 as the external policy shock point,the national povertystricken counties transferred in 2012 are selected as the treatment group,and adopts the panel data of 993 counties in China from 2005 to 2015.Firstly,this paper gives the treatment group one-to-one matching control group by the PSM method,and then uses the double difference method to identify the policy effect of the establishment of national poverty-stricken counties.The Empirical results show that the establishment of national poverty-stricken counties has a significant and long-lasting role in promoting local economic development.Moreover,the longer the national poverty-stricken counties are established,the greater the impacts are.The conclusion is established to robust tests.Secondly,this paper constructs a fixed-effects model to evaluate the role of national poverty-stricken Counties in driving various economic development drivers,and finds that the establishment of national poverty-stricken counties mainly promotes local economic development by optimizing the industrial structure and raising the level of investment in fixed assets.Finally,this paper combines the background of the current “uncap” of national poverty-stricken counties,and also selects the national poverty-stricken counties recalled in 2012 as the treatment group,and uses the PSMDID method to analyze the impacts of the “uncap” on local economic development.The empirical results show that after the “uncap” of national poverty-stricken counties,the local economy has not declined,but has continued to grow.Moreover,after the “uncap” of national poverty-stricken counties,the longer the time,the greater development advantages they got,and their economic development is getting better and better than the control group.In response to the above research findings,this paper further discusses its policy implications.