Is China a Leviathan?

Ze Zhu and Barbara Krug

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: (Last revised version December 2005) To address the problem why China, as a communist country, moves in the opposite direction when the public sector has undergoing a continuous growth in most Western economies since the World War II, we offer a new approach that the de facto fiscal decentralization curtails government size in transition China in addition to conventional explanations. Meanwhile, by analyzing panel data and various variables used by previous empirical studies, this paper tests the Leviathan hypothesis for vertical decentralization, horizontal fragmentation and intergovernmental collusion at central-provincial and provincial-local level. Our empirical results not only explain Chinese shrinking government size, but also lend support to Leviathan hypothesis, especially, under the condition of the absence of traditional democratic electoral constraint.

Keywords: China; Fiscal Decentralization; Leviathan; Transition Economy (search for similar items in EconPapers)
JEL-codes: F23 H11 M M14 P24 P35 (search for similar items in EconPapers)
Date: 2005-12-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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