IDEAS home Printed from https://ideas.repec.org/p/eab/financ/22027.html
   My bibliography  Save this paper

Fiscal Decentralisation and Local Public Good Provision in China

Author

Listed:
  • Xin-Qiao Ping

    (China Centre for Economic Research)

  • Jie Bai

Abstract

Fiscal incentive is closely related with the extra-budgetary revenues. Based on our definition of 'fiscal incentive', we explore the impacts of fiscal incentives under decentralisation on responsiveness of public good provision to real local needs. There are also some problems in fiscal decentralisation in China : first, with a huge basis of extra-budgetary revenue, the size of local government would be expanded, resulting in a heavier burden on the shoulder of local citizens and peasants; second, there exist some decreasing return to scale in local extra-budgetary expenditure; thirdly, 'urbanisation' (measured as the ratio of rural population to the total population) is negatively correlated with the local extra-budgetary expenditure on urban maintenance, indicating that in China, the process of industrialisation and urban construction are not consistent.

Suggested Citation

  • Xin-Qiao Ping & Jie Bai, 2005. "Fiscal Decentralisation and Local Public Good Provision in China," Finance Working Papers 22027, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:financ:22027
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/22027
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
    2. Faguet, Jean-Paul, 2004. "Does decentralization increase government responsiveness to local needs?: Evidence from Bolivia," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 867-893, March.
    3. Zhang, Xiaobo & Fan, Shenggen & Zhang, Linxiu & Huang, Jikun, 2004. "Local governance and public goods provision in rural China," Journal of Public Economics, Elsevier, vol. 88(12), pages 2857-2871, December.
    4. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
    5. Berkowitz, Daniel & Li, Wei, 2000. "Tax rights in transition economies: a tragedy of the commons?," Journal of Public Economics, Elsevier, vol. 76(3), pages 369-397, June.
    6. Shleifer, Andrei, 1997. "Government in transition," European Economic Review, Elsevier, vol. 41(3-5), pages 385-410, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Firth, Michael & Gong, Stephen X. & Shan, Liwei, 2013. "Cost of government and firm value," Journal of Corporate Finance, Elsevier, vol. 21(C), pages 136-152.
    2. United Cities and Local Governments, 2011. "Local Government Finance," Books, Edward Elgar Publishing, number 14696, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorena Viñuela, 2014. "Trends and Quality of Decentralized Public Investment," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1407, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Tristan Canare & Jamil Paolo Francisco & Rose Ann Camille Caliso, 2020. "Decentralization and Income Inequality in a Panel and Cross‐Section of Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(4), pages 543-579, May.
    3. Xu, Cheng-Gang, 2010. "The Institutional Foundations of China?s Reforms and Development," CEPR Discussion Papers 7654, C.E.P.R. Discussion Papers.
    4. Tsui, Kai-Yuen & Wang, Youqiang, 2008. "Decentralization with political trump: Vertical control, local accountability and regional disparities in China," China Economic Review, Elsevier, vol. 19(1), pages 18-31, March.
    5. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2019. "Local Decentralization and the Quality of Public Services in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 755-776, September.
    6. Kis-Katos, Krisztina & Sjahrir, Bambang Suharnoko, 2017. "The impact of fiscal and political decentralization on local public investment in Indonesia," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 344-365.
    7. Kappeler, Andreas & Solé-Ollé, Albert & Stephan, Andreas & Välilä, Timo, 2013. "Does fiscal decentralization foster regional investment in productive infrastructure?," European Journal of Political Economy, Elsevier, vol. 31(C), pages 15-25.
    8. Kiran Gajwani & Xiaobo Zhang, 2015. "Gender and Public Goods Provision in Tamil Nadu's Village Governments," The World Bank Economic Review, World Bank, vol. 29(2), pages 234-261.
    9. Hindriks, Jean & Peralta, Susana & Weber, Shlomo, 2008. "Competing in taxes and investment under fiscal equalization," Journal of Public Economics, Elsevier, vol. 92(12), pages 2392-2402, December.
    10. Sonin, Konstantin, 2010. "Provincial protectionism," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 111-122, June.
    11. Xiaoyu He & Bo Li, 2023. "A Study on the Influence of Green Industrial Policy on Urban Green Development: Based on the Empirical Data of Ecological Industrial Park Pilot Construction," Sustainability, MDPI, vol. 15(13), pages 1-29, June.
    12. Gradstein, Mark, 2017. "Government decentralization as a commitment in non-democracies," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 110-118.
    13. Emilie Caldeira & Martial Foucault & Gregoire Rota-Graziosi, 2015. "Decentralization in Africa and the nature of local governments’ competition: evidence from Benin," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(6), pages 1048-1076, December.
    14. Ahmad, Ehtisham & Brosio, Giorgio, 2009. "Decentralization and local service provision: what do we know?," LSE Research Online Documents on Economics 38347, London School of Economics and Political Science, LSE Library.
    15. Guccio, Calogero & Pignataro, Giacomo & Rizzo, Ilde, 2014. "Do local governments do it better? Analysis of time performance in the execution of public works," European Journal of Political Economy, Elsevier, vol. 34(C), pages 237-252.
    16. Yingyi Qian, 1999. "The Institutional Foundations of China's Market Transition," Working Papers 99011, Stanford University, Department of Economics.
    17. Zhuravskaya, Ekaterina V., 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Journal of Public Economics, Elsevier, vol. 76(3), pages 337-368, June.
    18. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    19. Zhang, Jinning & Wang, Jianlong & Yang, Xiaodong & Ren, Siyu & Ran, Qiying & Hao, Yu, 2021. "Does local government competition aggravate haze pollution? A new perspective of factor market distortion," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    20. 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.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:financ:22027. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.