WHICH BEGS THE QUESTION THOUGH:

China's growth pushed up by the grassroots (John Garnaut, June 15, Sydney Morning Herald)

Judging by the renewed egalitarian rhetoric of its leaders, the contrast between China's gaudy urban billionaires and its struggling rural poor is no longer just a political embarrassment. It is a problem of regime survival. President Hu Jintao and the Prime Minister, Wen Jiabao, have responded by banning rapacious local government taxes in rural areas and opening their wallets for huge spending on infrastructure, health and education. But even in this country of impossible ideological contradictions there is one solution they have not been talking about: democracy.

First, a primer on grassroots democracy, Chinese-style. Deng Xiaoping replaced Chairman Mao's disastrous communes with village management committees in the early 1980s. In 1987 he also began to introduce village elections. By the start of this millennium, grassroots democracy had spread to cover almost all Chinese villages. It was a remarkable development, and largely ignored by the West.

Candidates can stand if they are nominated by 10 or more local villagers. The core elected committee consists of a chairman, vice-chairman and accountant. Their terms are for three years. The system is far from perfect, as democratically elected committees can be challenged by parallel party committees, hijacked by local entrepreneurs or overridden by higher tiers of government. The obvious limitations of village democracy make its power all the more surprising.

Two Chinese economists, Shen Yan and Yao Yang, have analysed official household income data and their own retrospective surveys for 48 villages from 1986 to 2002. The data enabled the authors to control for China's enormous geographic disparities and the fact that incomes have been generally rising steeply. They discovered that the advent of village elections caused a sharp reduction in measured income inequality against a country-wide tide running fast the other way.

Do you end up with an egalitarianism of the impoverished or an income gap amongst the universally affluent, as in America?

Posted by Orrin Judd at June 17, 2007 12:02 AM