The Art of Governing: Nomads, Elites, and the Provision of Public Goods in China, 1738-1820

Abstract

How did eighteenth-century China manage to provide public goods nationwide despite its low tax rate? We construct a prefecture-level panel dataset from 1738 to 1820 and examine the effectiveness of the provision of public goods by the state granary system and elite services in mitigating price volatility. The results show that government intervention effectively smoothed grain price fluctuations in regions with greater military threats, whereas local elites played this role in other regions, suggesting that national defense concerns drove the distribution of state resources. In addition, the ability to collect taxes was not necessary for the provision of public goods.