Abstract: Developing rural collective economy is an effective pathway to achieving common prosperity. Competent village cadres are a critical prerequisite for advancing the collective economy in less developed regions. Based on data from 468 villages in Ningxia, this study demonstrates that competent village cadres have a dual impact on the sustainable development of the village-level collective economy and social integration. First, cadres with entrepreneurial competence enhance the net and operational revenues of the village collective economic entities, creating an economic impact termed the “efficacy of capability.” Second, cadres with public welfare responsibilities increase public spending and stimulate the farmers’ employment, generating a “capability-driven” social impact. Third, cadres with governance expertise leverage their personal resources to secure more supports and diversified industrial investments for village collective economic entities, achieving a synergistic development between “utilizing external resource” and “integrating internal resource,” thereby reproducing “economic-social” effects. Finally, a heterogeneity analysis based on institutional frameworks reveals that the impact of competent village cadres on the collective economy varies significantly with the adoption of the “concurrent post system”, the frequency of villager representative meetings, and the transparency of village-level finances, reflecting the reality that “capable cadres have both strengths and limitations”.