| Summary/Abstract |
The question of why some authoritarian regimes choose to incorporate institutions of democracy such as village elections into their governing systems remains largely unanswered. As a typical case of a resilient authoritarian state that implements democracy in its villages, China has provided an invaluable case for researchers to study. Current theories focus on the influence of political elites and rural forces separately. Insightful as they are, these theories are invalid as an explanation of the variation of local governance in China across time and thus are incomplete. It should be recognized that central fiscal strategies have great effects on local governance. Specifically, if the central government largely relies upon fiscal revenue from rural areas, it has to expand its bureaucracy to the countryside to extract revenue. In contrast, if it does not rely on the rural areas for revenue, the central government will establish local democracy in the countryside. This hypothesis is historically reflected in the authoritarian regimes led by the Nationalist Party (KMT) and Chinese Communist Party (CCP) in China. As opposed to the familiar story about representation through taxation, the logic of representation without taxation seems to be the case in China.
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