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Provincial public expenditure in China: a tale of pro-cyclicality

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  • Jean-Louis Combes

    (IDREC-CERDI, Université d’Auvergne)

  • Mary-Françoise Renard

    (IDREC-CERDI, Université d’Auvergne)

  • Sampawende J.-A. Tapsoba

    (International Monetary Fund
    Fondation pour les Etudes et Recherches sur le Développement International (Ferdi))

Abstract

This paper examines the cyclicality of provincial expenditure in China during the period 1978–2013. Using panel data for analysis, it assesses whether provincial expenditure has been pro-cyclical. Pro-cyclicality is found to be a regular feature of provincial fiscal policy. This pro-cyclicality occurs both in times of low and high growth rates and has markedly intensified since 1994 with the increased autonomy of provinces. The paper further finds that the pro-cyclicality bias is mitigated when financial constraints are relaxed, the remaining political life of the governor is long, government efficiency is strong, corruption incidence is low, and governments are large.

Suggested Citation

  • Jean-Louis Combes & Mary-Françoise Renard & Sampawende J.-A. Tapsoba, 2019. "Provincial public expenditure in China: a tale of pro-cyclicality," Economic Change and Restructuring, Springer, vol. 52(1), pages 19-41, February.
    • Handle: RePEc:kap:ecopln:v:52:y:2019:i:1:d:10.1007_s10644-017-9215-4
    DOI: 10.1007/s10644-017-9215-4
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    Cited by:

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    2. Thorsten Janus, 2020. "Terms of trade volatility, exports, and GDP," Economic Change and Restructuring, Springer, vol. 53(1), pages 25-38, February.
    3. Arkadiusz Michał Kowalski, 2021. "Dynamics and Factors of Innovation Gap Between the European Union and China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1966-1981, December.

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