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Fiscal Decentralization and Pattern of County Public Expenditures in a Chinese Province

Tao Qian () and Qi Zhang ()
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Tao Qian: China Academy of West Region Development, Zhejiang University
Qi Zhang: China Center for Economic Studies, School of Economics, Fudan University

Annals of Economics and Finance, 2017, vol. 18, issue 1, 201-226

Abstract: Using county-level fiscal data from China's Zhejiang province during 19942005, we study how intraprovincial fiscal decentralization impacts county public expenditures, while controlling the fiscal relationship of the central government embodied at the county level. We find greater intraprovincial fiscal decentralization is associated with more fiscal expenditure (growth) on local bureaucracy but less on local public goods, such as education and health care. In addition, the marginal effects of intraprovincial fiscal decentralization vary by county per capita GDP, suggesting that the role of fiscal decentralization depends on a local institutional environment that is tightly linked to the county development level.

Keywords: Intraprovincial Fiscal Decentralization; Pattern of County Public Expenditure; Selectorate (search for similar items in EconPapers)
JEL-codes: H77 H71 H30 O53 (search for similar items in EconPapers)
Date: 2017
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