ABSTRACT
Two stylized facts in rural China have drawn attention among researchers and policy-makers at home and abroad. One is that competitive elections for grassroots offices have become prevalent in the countryside; the other is that social conflicts between peasants and local officials have been growing since the mid-1990s. Based on the legal-soft-constraint (LSC) theory, the chapter aims to develop a local equilibrium model to explore the association between the center’s regulations, free-ride charges of local governments on peasants, and their strategies in implementing elections. It argues that due to LSC, local governments will levy more tax and fees than necessary to implement the mandates and will resist implementing the Law. The chapter describes the history and the practice of village democracy in rural China and the mandatory tasks assigned by the center. It explains the reason why great differences exist in implementing the Law across different regions from the perspective of the regulation argument.
