In the Name of Love: Policy Imitation, Political Incentives, and Local Economic Growth

Hai Hong, Yunfei Zhang and Kevin Chen

Economic Development and Cultural Change, 2026, vol. 75, issue 1, 309 - 365

Abstract: Policy experiments are widely accepted tools for promotion of economic growth in many countries. However, their effects may be undermined if they are masked by top-down enforcement that ignores local conditions. Using satellite night-light data, we investigate the economic effects of the Taobao villages (TBVs) program in China, a bottom-up pilot on rural e-commerce that is imitated nationwide under top-down directives. Exploiting a difference-in-differences design, we show that the establishment of TBVs reduces nighttime light of townships and therefore local economic growth. We provide evidence that the top-down directives in establishment of TBVs and the strategic behaviors of local officials motivated by political incentives are the potential driving forces.

Date: 2026
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