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Evolving public expenditure in Chinese agriculture: Definition, pattern, composition, and mechanism:

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  • Yu, Bingxin
  • Chen, Kevin Z.
  • Zhang, Yumei
  • Zhang, Haisen

Abstract

The Chinese economy has recently experienced a rapid and fundamental transformation, and the public expenditure on agriculture has also changed to reflect shifts in policy priorities. This paper reviewed public agricultural expenditure in a comprehensive way using detailed expenditure data at different administrative levels. The paper found that public expenditure for agriculture has increased steadily in China; however, the definition of agricultural spending might not precisely measure resources allocated to agricultural production. Some unique features of Chinese agricultural expenditure are identified, namely high decentralization and substantial intergovernmental transfer. The highly decentralized and hierarchical administrative system caused fragmentation in budget and implementation, resulting in rampant inefficiencies. Government expenditure also exhibits considerable regional disparity. This study recommends improving the fiscal system by rebalancing expenditure with revenues, prioritizing agricultural expenditure, and addressing regional disparities.

Suggested Citation

  • Yu, Bingxin & Chen, Kevin Z. & Zhang, Yumei & Zhang, Haisen, 2014. "Evolving public expenditure in Chinese agriculture: Definition, pattern, composition, and mechanism:," IFPRI discussion papers 1407, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1407
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    References listed on IDEAS

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    1. Roy Bahl & Sally Wallace, 2004. "Intergovernmental Transfers: The Vertical Sharing Dimension," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0419, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Wusheng Yu & Hans G. Jensen, 2010. "China's Agricultural Policy Transition: Impacts of Recent Reforms and Future Scenarios," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 343-368.
    3. Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 05/30, International Monetary Fund.
    4. World Bank, 2002. "China - National Development and Sub-National Finance : A Review of Provincial Expenditures," World Bank Other Operational Studies 15423, The World Bank.
    5. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    6. Chunli Shen & Jing Jin & Heng-fu Zou, 2012. "Fiscal Decentralization in China: History, Impact, Challenges and Next Steps," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 1-51, May.
    7. Shulian Deng & Jun Peng, 2011. "Reforming the Budgeting Process in China," OECD Journal on Budgeting, OECD Publishing, vol. 11(1), pages 75-89.
    8. Christine Wong, 2007. "Budget Reform in China," OECD Journal on Budgeting, OECD Publishing, vol. 7(1), pages 1-24.
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    Keywords

    public expenditure; Agriculture; Agricultural policies; Agricultural development; Governance; Investment; decentralization; regional disparity; transfers;

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