Fiscal Centralisation and Decentralisation in Russia and China
AbstractWe review the fiscal evolution of China and Russia and how the process of creating a separate tax-financed public sector in the two countries differed. China's fiscal budget was consistently smaller than in Russia, and their fiscal decentralisation was consistently greater. In China, local governments that were allowed to keep marginal increases in local tax revenue had incentives to pursue growth-supporting policies, but the absence of financial markets and barriers to investment resulted in protectionism and inefficient use of capital. Interregional fiscal transfers from the centre provided modest fiscal equalisation in China, but not in Russia. Russia's status as a petro-state makes efficient management of the public sector particularly difficult. Rising world energy prices and resource rents have generated growing federal budget surpluses, and fiscal recentralisation has been associated with expanding state control in other areas. Comparative Economic Studies (2007) 49, 514–542. doi:10.1057/palgrave.ces.8100225
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Comparative Economic Studies.
Volume (Year): 49 (2007)
Issue (Month): 4 (December)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Elliott Parker & Judith Thornton, 2006. "Fiscal Centralization and Decentralization in Russia and China," Working Papers 06-013, University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics.
- H6 - Public Economics - - National Budget, Deficit, and Debt
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
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