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Abstract
Why do authoritarian states impose large-scale public goods provision? Under what circumstances would authoritarian states stop maintaining the provision? This paper examines these questions in the case of China by using county-level data from 2004 – 2018 and instrumental variable design under the regional ethnic autonomy system. The results show that, overall, China’s regional ethnic autonomy system has had a positive effect on the provision of public goods in county-level ethnic regions. Further investigation reveals that this positive effect is significant from 2004 to 2009, but it is no longer significant since 2010. I suggest this is related to the ethnic conflicts that occurred around 2009, symbolizing the failure of an attempt to maintain support through extensive distribution. As a result, after 2009, the central government stopped providing preferential public goods to ethnic regions. The theoretical implication is that authoritarian states do have the capacity to provide public goods on a large scale and that multi-ethnic authoritarian states in particular may be willing to provide preferential public goods in exchange for stability. However, once such efforts are futile, authoritarian states will discontinue the preferential provision. The strategic action of the authoritarian states is intended to deter future challengers from making more expensive demands, out of concern for reputation costs. The reputation costs concern will also diffuse to other ethnic regions that do not confront separatist conflicts.