 Fiscal decentralization, fiscal reform, and economic growth in chinaYi Ding, Alexander McQuoid and Cem Karayalcin China Economic Review, 2019, vol. 53, issue C, 152-167 Abstract: In 1994, after a period of substantial fiscal decentralization that has been credited with leading to historically unprecedented growth rates but significant fiscal decline, China introduced a new fiscal system that recentralized the collection of tax revenues. The economic and political consequences of this new Tax Sharing System (TSS) have been debated extensively in the literature, especially because of the renewed interest in fiscal federalism and its interaction with political institutions and economic outcomes. The question central to this debate has been whether the TSS constitutes a significant departure from decentralization with adverse effects on fiscal federalism or whether the recentralization of revenues under the TSS corrects for the overshooting in decentralization with beneficial economic outcomes. This paper exploits the staggered introduction of the TSS across regions and over time for econometric identification purposes and finds robust causal evidence that the TSS had a positive impact on economic outcomes. Keywords: Fiscal decentralization; Fiscal reform; Economic growth; Tax sharing system (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:53:y:2019:i:c:p:152-167 DOI: 10.1016/j.chieco.2018.08.005 Access Statistics for this article China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu More articles in China Economic Review from Elsevier |
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