Political hierarchy and urban primacy: Evidence from China

Shiyu Bo and Chao Cheng

Journal of Comparative Economics, 2021, vol. 49, issue 4, 933-946

Abstract: This paper studies the distributional effects of a centralisation reform of China’s political hierarchy on regional urbanisation. Initiated in 1983, the reform, implemented over a 20-year period, transferred the decision-making powers of county-level governments to prefecture-level governments. We use a difference-in-differences approach to evaluate the heterogeneous urbanisation of counties in response to this centralisation reform. The distributional effects include greater urban primacy and a more marked core–periphery structure at the prefecture level. Further analyses reveal that the results are driven by the reallocation of fiscal resources and industrial production based on both productivity advantages and political favouritism.

Keywords: Centralisation; Political hierarchy; Distributional effect; Urban primacy; Core–periphery structure (search for similar items in EconPapers)
JEL-codes: H70 N95 O18 P48 R12 R50 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:49:y:2021:i:4:p:933-946

DOI: 10.1016/j.jce.2021.05.001

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