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Fiscal Decentralization and Growing Regional Disparities in Rural China: Some Evidence in the Provision of Social Services

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  • West, Loraine A
  • Wong, Christine P W
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    Abstract

    This paper provides evidence of inter-regional and inter-sectoral inequality in China by comparing local government provision of social services. An examination of a number of education and health status indicators reveals large disparities in the level and quality of service provision across regions, with service provision in poorer regions falling far short of targets enunciated in state policy. Fiscal centralization has weakened the capacity of government to effect equalization across regions. As the fiscal system moved towards self-financing, fiscal pressures particularly intensified for the county level, whose expenditure burdens have generally been increasing. With higher level governments themselves under severe fiscal strain and in no position to subsidize services, rural governments are forced to seek supplementary funding off budget, by imposing a variety of fees and levies. In poor regions, however, access to off-budget resources is limited, resulting in lower levels of service provided and amplification of regional inequalities. Copyright 1995 by Oxford University Press.

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    Bibliographic Info

    Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

    Volume (Year): 11 (1995)
    Issue (Month): 4 (Winter)
    Pages: 70-84

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    Handle: RePEc:oup:oxford:v:11:y:1995:i:4:p:70-84

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    Web page: http://oxrep.oupjournals.org/

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    Cited by:
    1. Wang, Zhiguo & Ma, Liang, 2012. "New Development of Fiscal Decentralization in China," MPRA Paper 36918, University Library of Munich, Germany.
    2. Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 05/30, International Monetary Fund.
    3. Adam Wagstaff & Winnie Yip & Magnus Lindelow & William C. Hsiao, 2009. "China's health system and its reform: a review of recent studies," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages S7-S23, July.
    4. Zhang, Xiaobo, 2006. "Fiscal Decentralization and Political Centralization in China: Implications for Growth and Inequality," Working Papers RP2006/93, World Institute for Development Economic Research (UNU-WIDER).
    5. Zhang, Xiaobo & Kanbur, Ravi, 2005. "Spatial inequality in education and health care in China," China Economic Review, Elsevier, vol. 16(2), pages 189-204.
    6. John Knight & Li Shi & Deng Quheng, 2008. "Education and the Poverty Trap in Rural China," Economics Series Working Papers WPS/2008-02, University of Oxford, Department of Economics.
    7. Eckaus, R. S., 2003. "Some consequences of fiscal reliance on extrabudgetary revenues in China," China Economic Review, Elsevier, vol. 14(1), pages 72-88.
    8. Jia CUI & Shaomin HUANG & Gerald RAMEY, 2009. "China’s Healthcare Reform And Resources Redistribution: Lessons For Emerging Nations," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 4, pages 27-42, November.
    9. Hai Zhong, 2010. "The impact of decentralization of health care administration on equity in health and health care in Canada," International Journal of Health Care Finance and Economics, Springer, vol. 10(3), pages 219-237, September.
    10. Dolores Jiménez-Rubio & Peter C. Smith & Eddy Van Doorslaer, 2008. "Equity in health and health care in a decentralised context: evidence from Canada," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 377-392.
    11. International Monetary Fund, 2004. "Toward More Effective Redistribution: Reform Options for Intergovernmental Transfers in China," IMF Working Papers 04/98, International Monetary Fund.
    12. Ziang, Xiaobo, 2005. "Fiscal decentralization and political centralization in China," DSGD discussion papers 21, International Food Policy Research Institute (IFPRI).

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