TITLE

The national and regional effects of fiscal decentralisation in China

AUTHOR(S)
Chen, Anping; Groenewold, Nicolaas
PUB. DATE
December 2013
SOURCE
Annals of Regional Science;Dec2013, Vol. 51 Issue 3, p731
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Fiscal decentralisation has been an important part of the restructuring of China’s economy over the past three decades. Yet, there has been only limited analysis of the way in which decentralisation in China might affect variables such as welfare, output and income at the aggregate level and none at the regional level. This paper makes a start at filling this gap by analysing the aggregate and regional effects of various policies which aim to change the balance between fiscal activities of the national and regional governments. For this, we use a small theoretical model designed to capture some of the features of the Chinese economy, and we solve it numerically using a parameterisation based on Chinese data. We analyse the effects of four different shocks; all of them involve a transfer of resources to the regional governments financed by a cut in central government expenditure, but they differ in the way in which regional governments use the additional funds: (1) they adjust expenditure on the consumption good, (2) they adjust infrastructure expenditure, (3) they maximise the size of their own budget, and (4) they maximise the welfare of the representative citizen. We find that the aggregate economic effects of decentralisation depend on the precise nature of the policy and that aggregate benefits may often mask a deterioration in the inter-regional distribution of those benefits.
ACCESSION #
91997115

 

Related Articles

  • SYMPOSIUM ON CHINA STUDIES. Bartle, John R.; Yonghong Wu; Zhirong Jerry Zhao // Public Finance & Management;Sep2011, Vol. 11 Issue 3, p231 

    To meet the increasing scholarly interest in China, this symposium provides a forum for scholars in public budgeting and finance to exchange research on China-related issues. There have been new initiatives to reform China's public fiscal system in the past two decades. The papers in this...

  • On the determinants of public infrastructure spending in Chinese cities: A spatial econometric perspective. Yu, Yihua; Zhang, Li; Li, Fanghua; Zheng, Xinye // Social Science Journal;Sep2011, Vol. 48 Issue 3, p458 

    Abstract: In the context of fiscal decentralization, we use cross-sectional data of 242 Chinese cities in 2005 to explore the major factors contributing to the decline of public investment. The main finding is that a city government appears to reduce its own infrastructure spending as a response...

  • Discretionary fiscal policy and economic activity in Greece. Tagkalakis, Athanasios // Empirica;Nov2014, Vol. 41 Issue 4, p687 

    This paper investigates the effects of discretionary fiscal policy changes on economic activity and its subcomponents in Greece in the period 2000-2011. Changes in government spending and net taxes have Keynesian effects. An increase in government consumption has the most pronounced positive...

  • The meaning of “social capital” as it relates to the market process. Ikeda, Sanford // Review of Austrian Economics;Jun2008, Vol. 21 Issue 2/3, p167 

    There is an unhelpful vagueness in the meaning of social capital. While this article does not provide a definitive interpretation of this important concept, after examining a representative sample of various usages—including the contributions of Becker, Coleman, Jacobs, and...

  • INDONESIA'S FISCAL DECENTRALIZATION AND ITS EFFECT ON PROVINCIAL PUBLIC FINANCES. Seifert, Jan; Hui LI // Public Finance & Management;2015, Vol. 15 Issue 2, p108 

    No abstract available.

  • Pigou, Taxation and Public Goods. Atkinson, A.B.; Stern, N.H. // Review of Economic Studies;Jan74, Vol. 41 Issue 1, p119 

    The results of Samuelson in the theory of public goods have provided the basis for most subsequent discussion of the optimum provision of public goods. Samuelson showed that a necessary condition for Pareto Optimality (and hence for maximizing a social welfare function which responds positively...

  • Trenton's Feel-Good Phonies. Scarry, Donald M. // Business News New Jersey;12/11/2001, Vol. 14 Issue 50, p16 

    Focuses on the fiscal policies in New Jersey. Creation of assets for future revenues; Construction of public infrastructures for long term benefits; Bond financing for annual operating costs.

  • Intergovernmental Fiscal Arrangements and Provincial Consumption Risk Sharing in China. Lai, Jennifer T.; So, Erin P. K.; Yan, Isabel K. M. // Emerging Markets Finance & Trade;May/Jun2014, Vol. 50 Issue 3, p45 

    This paper utilizes a panel data set on two major fiscal reforms in China-the fiscal contract system (FCS) in 1980-93 and the tax-sharing system (TSS) after 1994-to examine how the various aspects of intergovernmental fiscal arrangement affect the ability of the fiscal system to facilitate risk...

  • GLOBALIZATION OF ECONOMY - PREMISES AND EFFECTS. BRAN, Florina // USV Annals of Economics & Public Administration;2015 Special Issue, p7 

    This paper is providing an overview of global economy, highlighting following aspects: premises of globalization process in economy, their effects and subsequent reactions which occur, for a proper management of adverse effects. Our approach facilitates understanding of globalization process...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics