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Efficient Scale of Local Government in China: Quantile Regression Approach to County-Level Data

Author Info

Listed author(s):
  • Mototsugu Fukushige

    ()

    (Graduate School of Economics, Osaka University)

  • Yingxin Shi

    ()

    (Department of Economics & Management, Dalian Nationalities University)

Abstract

We investigate the effects of urban and rural populations and area sizes on the expenditures of the prefecture-level local government. We found the following three results. The first relates to the expenditure for urban populations. At around 220,000 people, per capita local government expenditure is minimized in our simulation. The second is that the expenditure for rural populations is proportional to the population size. The third finding is that the expenditure in accordance with the areas is also proportional to the area size. This cost structure is the reason why China fs recent rapid urbanization increases prefectural government fs fiscal distress.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1415.pdf
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 14-15.

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Length: 38 pages
Date of creation: Apr 2014
Handle: RePEc:osk:wpaper:1415
Contact details of provider: Web page: http://www2.econ.osaka-u.ac.jp/library/global/e_HP/e_g_shiryo.html
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Keywords: Efficient scale; Local government; Quantile regression; China;

Find related papers by JEL classification:

  • H40 - Public Economics - - Publicly Provided Goods - - - General
  • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
  • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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