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Fiscal Decentralization and Pattern of County Public Expenditures in a Chinese Province

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  • Tao Qian

    (China Academy of West Region Development, Zhejiang University)

  • Qi Zhang

    (China Center for Economic Studies, School of Economics, Fudan University)

Abstract

Using county-level fiscal data from China's Zhejiang province during 19942005, we study how intraprovincial fiscal decentralization impacts county public expenditures, while controlling the fiscal relationship of the central government embodied at the county level. We find greater intraprovincial fiscal decentralization is associated with more fiscal expenditure (growth) on local bureaucracy but less on local public goods, such as education and health care. In addition, the marginal effects of intraprovincial fiscal decentralization vary by county per capita GDP, suggesting that the role of fiscal decentralization depends on a local institutional environment that is tightly linked to the county development level.

Suggested Citation

  • Tao Qian & Qi Zhang, 2017. "Fiscal Decentralization and Pattern of County Public Expenditures in a Chinese Province," Annals of Economics and Finance, Society for AEF, vol. 18(1), pages 201-226, May.
    • Handle: RePEc:cuf:journl:y:2017:v:18:i:1:qian:zhang
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Intraprovincial Fiscal Decentralization; Pattern of County Public Expenditure; Selectorate;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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