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

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Author Info
Singh, Nirvikar

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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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Related research
Keywords: cooperative federalism competitive federalism market-preserving federalism decentralization economic development

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Find related papers by JEL classification:
P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jorge Martinez-Vazquez & Mark Rider, 2005. "Fiscal Decentralization and Economic Growth: A Comparative Study of China and India," International Studies Program Working Paper Series, at AYSPS, GSU paper0519, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  2. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-62, December. [Downloadable!] (restricted)
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  3. M. Govinda Rao & Nirvikar Singh, 2007. "The Political Economy of India's Fiscal Federal System and its Reform," Publius: The Journal of Federalism, Oxford University Press, vol. 37(1), pages 26-44. [Downloadable!] (restricted)
    Other versions:
  4. Bardhan, Pranab & Mookherjee, Dilip, 2006. "Pro-poor targeting and accountability of local governments in West Bengal," Journal of Development Economics, Elsevier, vol. 79(2), pages 303-327, April. [Downloadable!] (restricted)
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  5. Christopher Heady, 1998. "Local Government Finance and Industrial Policy in China," Economic Change and Restructuring, Springer, vol. 31(2), pages 195-212, May. [Downloadable!] (restricted)
  6. Xiaolan Fu & V.N. Balasubramanyam, 2003. "Township and Village Enterprises in China," The Journal of Development Studies, Taylor and Francis Journals, vol. 39(4), pages 27-46, April. [Downloadable!] (restricted)
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  7. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April. [Downloadable!] (restricted)
  8. Heady, Christopher, 1998. " Local Government Finance and Industrial Policy in China," Economic Change and Restructuring, Springer, vol. 31(2-3), pages 195-212. [Downloadable!] (restricted)
  9. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September. [Downloadable!]
  10. Abhijit Banerjee & Lakshmi Iyer & Rohini Somanathan, 2005. "History, Social Divisions, and Public Goods in Rural India," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 639-647, 04/05. [Downloadable!] (restricted)
  11. Banerjee, Abhijit & Somanathan, Rohini, 2007. "The political economy of public goods: Some evidence from India," Journal of Development Economics, Elsevier, vol. 82(2), pages 287-314, March. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Singh, Nirvikar, 2007. "The Dynamics of Reform of India’s Federal System," MPRA Paper 2282, University Library of Munich, Germany. [Downloadable!]
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