Fiscal decentralization, public spending, and economic growth in China

Tao Zhang () and Heng-Fu Zou ()

No 58, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: This study of China demonstrates how the allocation of fiscal resources between the central and local governments has affected economic growth since reforms began in the late 1970s. We find that a higher degree of fiscal decentralization of government spending is associated with lower provincial economic growth over the past fifteen years. This consistently significant and robust result in our empirical examinations is surprising in light of the argument that fiscal decentralization usually makes a positive contribution to local economic growth.

Keywords: Fiscal decentralization; Public spending; Growth; Chinese economy (search for similar items in EconPapers)
JEL-codes: E62 H2 H4 H5 O4 R5 (search for similar items in EconPapers)
Date: 2001
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Published in Journal of Public Economics, Volume 67, Issue 2, 1 February 1998, Pages 221-240

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Related works:
Journal Article: Fiscal decentralization, public spending, and economic growth in China (1998)
Working Paper: Fiscal decentralization, public spending, and economic growth in China (1996)
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Persistent link: http://EconPapers.repec.org/RePEc:cuf:wpaper:58

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