To improve the anti-poverty strategy and policy system, as well as to accumulate experience of linking poverty alleviation and rural revitalization, China launched the Pilot Poverty Alleviation Reform Zone policy in six coastal provinces in 2013 and 2015. Given that the policies implemented in those provinces were different, it is worth separately evaluating the economic growth effects of the pilot policy for each province. In this study, drawing on a county panel of Jiangsu province from 2011 to 2020 and the difference-in-differences approach, we empirically estimate the effect of the Pilot Poverty Alleviation Reform Zone policy on local economic development and the mechanisms behind it. We find that the policies implemented in Jiangsu province is conducive to local economic growth. We also find that (i) the policy increased the outputs of three sectors, where the first and second sectors benefited the most; (ii) the fiscal expenditure and credit inclination were critical for the development; and (iii) the economic growth was primarily driven by employment increment and technology improvement. Moreover, the pilot policy promoted local living conditions by increasing the rural households’ income and improving sanitary and educational conditions. However, it had few effect on increasing rural households’ consumption.