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Issues in Intergovernmental Fiscal Relations in China


  • Era Dabla-Norris


The paper reviews the changing nature of intergovernmental fiscal relations between the provinces and the central government in China over the past two decades and provides an assessment of the success of previous reforms in meeting their objectives. Key existing weaknesses in the current system that undermine these objectives are identified. Alternative instruments, procedures, rules, and incentives that could result in better outcomes are outlined by drawing upon relevant cross-country experiences.

Suggested Citation

  • Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 05/30, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/30

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    References listed on IDEAS

    1. Zhang, Xiaobo & Kanbur, Ravi, 2005. "Spatial inequality in education and health care in China," China Economic Review, Elsevier, vol. 16(2), pages 189-204.
    2. Jing Jin & Heng-fu Zou, 2003. "Soft Budget Constraints on Local Government in China," CEMA Working Papers 132, China Economics and Management Academy, Central University of Finance and Economics.
    3. Agarwala, R., 1992. "China: Reforming Intergovernmental Fiscal Relations," World Bank - Discussion Papers 178, World Bank.
    4. Bert Hofman & Susana Cordeira Guerra, 2004. "Ensuring Inter-regional Equity and Poverty Reduction," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0411, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Eswar S Prasad, 2004. "China's Growth and Integration into the World Economy; Prospects and Challenges," IMF Occasional Papers 232, International Monetary Fund.
    6. Zhihua Zhang & Jorge Martinez-Vazquez, 2003. "The System of Equalization Transfers in China," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0312, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Jonathan A. Rodden & Gunnar S. Eskeland (ed.), 2003. "Fiscal Decentralization and the Challenge of Hard Budget Constraints," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182297, January.
    8. International Monetary Fund, 2004. "Toward More Effective Redistribution; Reform Options for Intergovernmental Transfers in China," IMF Working Papers 04/98, International Monetary Fund.
    9. Raju J Singh & Ben Lockwood & Ehtisham Ahmad, 2004. "Taxation Reforms and Changes in Revenue Assignments in China," IMF Working Papers 04/125, International Monetary Fund.
    10. West, Loraine A & Wong, Christine P W, 1995. "Fiscal Decentralization and Growing Regional Disparities in Rural China: Some Evidence in the Provision of Social Services," Oxford Review of Economic Policy, Oxford University Press, vol. 11(4), pages 70-84, Winter.
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    Cited by:

    1. Uchimura, Hiroko & Jütting, Johannes P., 2009. "Fiscal Decentralization, Chinese Style: Good for Health Outcomes?," World Development, Elsevier, vol. 37(12), pages 1926-1934, December.
    2. 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.
    3. Chen, Yiu Por (Vincent), 2015. "Fiscal Decentralization, Rural Industrialization, and Undocumented Labor Mobility in Rural China (1982-87)," IZA Discussion Papers 9024, Institute for the Study of Labor (IZA).
    4. Jiwei Lou & Shuilin Wang, 2008. "Public Finance in China : Reform and Growth for a Harmonious Society," World Bank Publications, The World Bank, number 6360, June.
    5. 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).
    6. Shah, Anwar, 2005. "Fiscal decentralization and fiscal performance," Policy Research Working Paper Series 3786, The World Bank.

    More about this item


    China; Intergovernmental fiscal relations; Fiscal policy; expenditure; expenditures; expenditure assignments; fiscal relations; intergovernmental fiscal; Taxation; Subsidies; and Revenue: General;

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