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The nature of the collective ownership may make it easier for the local governments to purse private benefits from the return of the public investments on the collective operation. This may lead to disproportionate allocation of public funds to favour collective-owned operation as opposed to private production, though such allocation did not always benefit the majority of the villagers. The introduction of election in local governments may decrease the extent of her capture from public investments on the collective, for the reason that the village head needs to take not only the private interest but also the votes into her consideration when allocating the public funds. In this paper, we found evidence that the allocation of the public funds is sensitive to the change of the demographic weight of collective groups although no disproportionate allocation has been assigned to the collective group. And election had no effects on the allocation pattern of the production related public funds.


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