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Fiscal Decentralization in China and India: Competitive, Cooperative or Market Preserving Federalism?

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  • Singh, Nirvikar

Abstract

This paper provides a comparative assessment of fiscal decentralization in China and India, including the standard components of expenditure and revenue assignments and institutions for intergovernmental transfers, as well as the nature of subnational authorities over general economic activity. In particular, the case of China, where town and village enterprises have been very active, is contrasted with that of India, where local governments remain circumscribed in their authority, despite decentralizing reforms. The implications of differences in decentralization for fiscal outcomes and economic growth are discussed. The characterization of each country in terms of concepts of federalism, i.e., competitive, cooperative and market preserving federalism, is discussed, in attempting to abstract from the two cases to more general lessons for fiscal decentralization.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1705.

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Date of creation: Jan 2007
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Handle: RePEc:pra:mprapa:1705

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Keywords: cooperative federalism; competitive federalism; market-preserving federalism; decentralization; economic development;

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  17. Jorge Martinez-Vazquez & Mark Rider, 2005. "Fiscal Decentralization and Economic Growth: A Comparative Study of China and India," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0519, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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Cited by:
  1. Singh, Nirvikar & Srinivasan, T.N., 2006. "Federalism and economic development in India: An assessment," MPRA Paper 12452, University Library of Munich, Germany, revised Aug 2008.
  2. Singh, Nirvikar, 2007. "The Dynamics of Reform of India’s Federal System," MPRA Paper 2282, University Library of Munich, Germany.
  3. Singh, Nirvikar, 2007. "The Dynamics of Reform of India’s Federal System," Santa Cruz Department of Economics, Working Paper Series qt9gh5p65t, Department of Economics, UC Santa Cruz.

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