Rural tax reform and the extractive capacity of local state in China
AbstractChina's fiscal arrangement in the 1980s has preserved local governments' incentive but the 1994 fiscal reform recentralized revenues. Since then, farmers' tax burdens have risen steeply and become a major challenge to the state legitimacy. How to account for the huge regional variation? Why were some localities able to tax more heavily than others? Based on a national survey of village governance in China, we examine farmers' burdens empirically and identify political and social factors that explain the local governments' ability to tax farmers. This paper suggests that developments since the 1990s have shown that it overstates local discretionary power and does not pay enough attention to societal forces in understanding local public finance.
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Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 23 (2012)
Issue (Month): 1 ()
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Central–local relations; Local public finance; Farmers' burdens; Rural Tax reform; China;
Find related papers by JEL classification:
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
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