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Research on the optimization of the intergovernmental sharing mechanism of public services under the new pattern of "dual circulation"

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  • Liu, Yanmei
  • Wu, Rui
  • Huang, Jingxin
  • Li, Jingyun

Abstract

This study employs the System Generalized Method of Moments (GMM) to analyze and test the impact of the central government's moderate collection of public service powers on local economic development. The results demonstrate that a 1 % increase in the degree of recentralization leads to a 1.2852 % improvement in local economic operational efficiency, confirming the necessity and significance of the central government's recentralization of public service responsibilities. Furthermore, the level of local economic development plays a positive moderating role in this relationship—higher levels of local economic development amplify the positive effect of recentralization on local economic operational efficiency. This study enriches the application of fiscal decentralization theory in the Chinese context and provides practical policy recommendations for achieving high-quality development and mitigating public risks under the "dual circulation" new development paradigm, holding significant theoretical and practical implications.

Suggested Citation

  • Liu, Yanmei & Wu, Rui & Huang, Jingxin & Li, Jingyun, 2025. "Research on the optimization of the intergovernmental sharing mechanism of public services under the new pattern of "dual circulation"," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025007178
    DOI: 10.1016/j.iref.2025.104554
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    References listed on IDEAS

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    2. Huther, Jeff & Shah, Anwar, 1998. "Applying a simple measure of good governance to the debate on fiscal decentralization," Policy Research Working Paper Series 1894, The World Bank.
    3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
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