Determinants of government size: Evidence from China
AbstractThis paper investigates the determinants of government size at the provincial level in China. We employ the panel data model as a platform for empirical analysis and control for endogeneity in the study. Our study shows that openness to trade and foreign direct investment (FDI) may curtail government expansion, and that the provincial-level public sector is characterized by economies of scale. This study also documents that Wagner’s law does not hold true for China. Moreover, both expenditure decentralization and revenue decentralization contribute to the expansion of China’s government.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27089.
Date of creation: 23 Nov 2010
Date of revision:
Government size - Wagner’s law - Scale effects - Openness to trade - Fiscal decentralization;
Other versions of this item:
- Alfred Wu & Mi Lin, 2012. "Determinants of government size: evidence from China," Public Choice, Springer, vol. 151(1), pages 255-270, April.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-PBE-2010-12-18 (Public Economics)
- NEP-TRA-2010-12-18 (Transition Economics)
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