Political elites and access to economic opportunities in China’s rural market transition

Understanding whether political elites maintain advantages in accessing economic opportunities during market transitions is crucial for assessing the distributional consequences of market-oriented reforms. This study examines whether political status provides rural households with advantages in accessing production resources and income opportunities during China’s recent wave of marketization, and how these advantages vary with the degree of market development. Using three waves of the China Family Database spanning 2015–2019 and employing an instrumental variable approach, we find that political elites maintain persistent advantages in accessing economic opportunities. Relative to non-elites, cadre households exhibit 20.1 percentage points higher rates of receiving agricultural subsidies, 38.8 percentage points higher rates of owning agricultural machinery, and 9.7 percentage points greater likelihood of operating nonfarm businesses. As marketization advances, the sources of elite advantage shift from agriculture to commercial activities. While advantages in agricultural production weaken, reflecting reduced state-controlled resource allocation channels, advantages in business operations strengthen consistent with elites converting political capital into entrepreneurial opportunities. Our findings suggest that rural marketization in China reallocates rather than reduces opportunity gaps. This pattern indicates that even as market reforms diminish traditional avenues for political privilege, they simultaneously open new market-based opportunities that preserve elite advantage. These findings have broader implications for understanding how political power influences access to opportunities during market transitions in developing economies.