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Fiscal Disparities and the Equalization Effects of Fiscal Transfers at the County Level in China

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  • Yin Heng

    (School of Economics and Business Administration, Beijing Normal University)

Abstract

Using the fiscal datasets from 1993 to 2003 in China, this paper studies fiscal disparities and the equalization effects of fiscal transfers at the county level. The results indicate that there are huge fiscal disparities across regions, and this kind of inequality takes on a lasting upward trend. The persistence of fiscal inequality is very high, and also trends upward. Moreover, transfers from upper governments exaggerate fiscal disparities at the county level. The earmarked subsidies and tax rebates are the most unequal fiscal transfer schemes. The factor transfers have some equalization effects when we take per capita fiscal ability calculated by fiscal-supported population into account, but neutralization effects disappear from the viewpoint of per-capita fiscal ability averaged by total population.

Suggested Citation

  • Yin Heng, 2008. "Fiscal Disparities and the Equalization Effects of Fiscal Transfers at the County Level in China," Annals of Economics and Finance, Society for AEF, vol. 9(1), pages 115-149, May.
    • Handle: RePEc:cuf:journl:y:2008:v:9:i:1:p:115-149
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    References listed on IDEAS

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    Cited by:

    1. Masayoshi Hayashi & Akiko Oyama, 2014. "Factor Decomposition of Inter-prefectural Health Care Expenditure Disparities in Japan," CIRJE F-Series CIRJE-F-948, CIRJE, Faculty of Economics, University of Tokyo.
    2. Capella-Ramos, João & Checherita-Westphal, Cristina & Leiner-Killinger, Nadine, 2020. "Fiscal transfers and economic convergence," Occasional Paper Series 252, European Central Bank.
    3. Gong, Liutang & Zou, Heng-fu, 2012. "Risk-taking, fiscal policies, asset pricing, and stochastic growth with the spirit of capitalism," MPRA Paper 37426, University Library of Munich, Germany.
    4. Alejandra Trejo-Nieto, 2021. "The geography of financial condition in the Mexico City metropolitan area," Local Economy, London South Bank University, vol. 36(6), pages 487-504, September.
    5. Yubo Hou & Ge Gao & Fei Wang & Tingrui Li & Zhilan Yu, 2011. "Organizational Commitment and Creativity: the Influence of Thinking Styles," Annals of Economics and Finance, Society for AEF, vol. 12(2), pages 411-431, November.
    6. Masayoshi Hayashi, 2013. "On the Decomposition of Regional Stabilization and Redistribution," CIRJE F-Series CIRJE-F-910, CIRJE, Faculty of Economics, University of Tokyo.
    7. Peng Zhang & Mann Xu, 2011. "The View from the County: China's Regional Inequalities of Socio-Economic Development," Annals of Economics and Finance, Society for AEF, vol. 12(1), pages 183-198, May.
    8. Zou, Heng-fu, 2012. "Optimal design of intergovernmental grants in a dynamic model," MPRA Paper 37427, University Library of Munich, Germany.
    9. Jing Jin & Chunli Shen & Heng-fu Zou, 2012. "Fiscal Decentralization and Peasants' Financial Burden in China," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 53-90, May.
    10. Yongzheng Liu & Jorge Martinez-Vazquez & Baoyun Qiao, 2014. "Falling Short: Intergovernmental Transfers in China," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1423, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    11. Liu, Qijun & Song, Lijie, 2022. "Do intergovernmental transfers boost intergenerational income mobility? Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 293-309.

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    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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