Fiscal Decentralisation and Local Public Good Provision in China
AbstractFiscal incentive is closely related with the extra-budgetary revenues. Based on our definition of 'fiscal incentive', we explore the impacts of fiscal incentives under decentralisation on responsiveness of public good provision to real local needs. There are also some problems in fiscal decentralisation in China : first, with a huge basis of extra-budgetary revenue, the size of local government would be expanded, resulting in a heavier burden on the shoulder of local citizens and peasants; second, there exist some decreasing return to scale in local extra-budgetary expenditure; thirdly, 'urbanisation' (measured as the ratio of rural population to the total population) is negatively correlated with the local extra-budgetary expenditure on urban maintenance, indicating that in China, the process of industrialisation and urban construction are not consistent.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Finance Working Papers with number 22027.
Date of creation: Jun 2005
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Fiscal decentralisation; local public good provision; fiscal incentives;
Find related papers by JEL classification:
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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