In developing countries, identifying the most effective community-level governance mode is a
key issue in rural development; therefore, empirical evaluation of these different modes is
desperately needed. Since the 1980s, tens of thousands of villages in rural China have held local
government elections, providing a good opportunity to investigate the effect of democratization on
the level of public goods provision. Using a recent village survey conducted over a significant period
of time, this article compares two different governance modes. It finds that elections affect little on
the size of revenue but significantly shift the distribution of taxation from individuals to enterprises if
possible. However, privatization has made taxation or levies on rural enterprises more difficult. It
also shows that elections and power sharing are conducive to improve the allocation of public
expenditures.