China - National Development and Sub-National Finance : A Review of Provincial Expenditures

By Christine P. W. Wong, Deepak Bhattasali. 2002

217 citations recorded by the source corpus.

In China, the highly decentralized fiscal system undermines improvements in policy outcomes and contributes to increasing disparities among its regions. However, rather than re-centralizing, China would benefit from pursuing reforms to: improve expenditure and revenue assignments for the various levels of government; distribute fiscal resources more equally; and improve the use of these resources through better budget management at all levels of government. This report recommends a comprehensive reform effort that covers all the components of the inter-governmental fiscal system, arguing that selective interventions to address specific local financial problems such as defaults on pension and unemployment stipends, and payment arrears on teachers ' salaries, have created some pervasive incentives. A piecemeal approach to inter-governmental fiscal reform is unlikely to succeed because it will not take into account the interdependence of transfers on revenue assignments or the role played by expenditure assignments on the adequacy of revenue assignments and transfers.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/1f99280b1b4a5110c35671ef0fb49cc496465022

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Citations in the corpus

Land Leasing and Local Public Finance in China’s Regional Development: Evidence from Prefecture-level Cities: (2010, methodology): “Social service spending was decentralized further down to the county level with the sub-provincial tiers financing seventy percent of social services, provincial and central governments making up the other twenty and ten percents, respectively (World Bank, 2002).”
Show Me the Money: Interjurisdiction Political Competition and Fiscal Extraction in China (2014, background): “Nonetheless, the TSS has also generated adverse consequences for local public finance, particularly in the form of a serious fiscal imbalance at subnational levels (e.g., Bernstein and Lü 2003; Dabla-Norris 2005; Oi et al. 2012; Park et al. 1996; World Bank 2002).”
Urbanization, Land Development, and Land Financing: Evidence from Chinese Cities (2014, background): “He is also the author or co-author of articles in such journals as World Development, Public Choice, Publius: The Journal of Federalism, Review of Public Personnel Administration, Social Policy and Society, and Journal of Contemporary China.”
Fiscal Decentralization in China: History, Impact, Challenges and Next Steps (2012, background): “During a seminar held by the Ministry of Finance and World Bank in Dali 2004, a local officer visualized the picture of local government financing with his words, “Center finances are booming; provincial finances are improving; prefectural finances are not bad; county finances are near-bankrupt; and”
Land and Urban Economic Growth in China (2011, unknown): “They did not, however, alter local governments’ expenditure obligations nor did they lessen the pressure on local governments to invest in infrastructure and otherwise promote economic growth (Wong and Bhattasali, 2003; Zhang and Martinex-Vazquez, 2003).”
Local officials as land developers: Urban spatial expansion in China (2009, background): “…new set of fiscal measures that included a reallocation of tax revenues in favor of the central government, which had run persistent deficits, at the expense of local governments, which had run persistent surpluses (Wong and Bhattasali, 2003; Zhang and Martinez-Vazquez, 2003; Zhang and Liu, 2003).”
Racing to the Bottom or to the Top? Decentralization, Revenue Pressures, and Governance Reform in China (2017, unknown): “Subnational governments in China spend 70 per cent of public money, amounting to 22 per cent of GDP, among the highest levels in Asia (World Bank 2002, World Bank and United Cities and Local Governments, 2009).”
Urbanization of Capital or Capitalization on Urban Land? Land Development and Local Public Finance in Urbanizing China (2011, background): “Subsequent research has shown that fiscal decentralization significantly aroused interest in local development, augmented local revenue, and weakened the financial capacity of the central state (Wong, 1991; Wong et al., 1995; Chung, 1995).”
Fiscal decentralization, political centralization, and land urbanization in China (2016, background): “Both local governments and firms are motivated to use urban land to mobilize banking loans, which, in turn, sustains their economic development. Furthermore, the rank of per capita GDP (PGDP_RANK) within the same province affects the pace of land urbanization. Top-ranking cities within a province ar”