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Fiscal Decentralization in China and India: Competitive, Cooperative or Market Preserving Federalism?

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  • Singh, Nirvikar

Abstract

This paper provides a comparative assessment of fiscal decentralization in China and India, including the standard components of expenditure and revenue assignments and institutions for intergovernmental transfers, as well as the nature of subnational authorities over general economic activity. In particular, the case of China, where town and village enterprises have been very active, is contrasted with that of India, where local governments remain circumscribed in their authority, despite decentralizing reforms. The implications of differences in decentralization for fiscal outcomes and economic growth are discussed. The characterization of each country in terms of concepts of federalism, i.e., competitive, cooperative and market preserving federalism, is discussed, in attempting to abstract from the two cases to more general lessons for fiscal decentralization.

Suggested Citation

  • Singh, Nirvikar, 2007. "Fiscal Decentralization in China and India: Competitive, Cooperative or Market Preserving Federalism?," MPRA Paper 1705, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:1705
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    Cited by:

    1. Pierre Salmon, 2013. "Reforms and decentralization: friends or foes?," Chapters, in: Francisco Cabrillo & Miguel A. Puchades-Navarro (ed.), Constitutional Economics and Public Institutions, chapter 5, pages 68-89, Edward Elgar Publishing.
    2. Singh, Nirvikar & Srinivasan, T.N., 2006. "Federalism and economic development in India: An assessment," MPRA Paper 12452, University Library of Munich, Germany, revised Aug 2008.
    3. Nirvikar Singh, 2007. "The dynamics of reform of India’s federal system," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(01), pages 22-31, April.
    4. Nirvikar Singh, 2007. "The dynamics of reform of India’s federal system," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(1), pages 22-31, April.

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    More about this item

    Keywords

    cooperative federalism; competitive federalism; market-preserving federalism; decentralization; economic development;
    All these keywords.

    JEL classification:

    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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