Research on the optimization of the intergovernmental sharing mechanism of public services under the new pattern of "dual circulation"

Yanmei Liu, Rui Wu, Jingxin Huang and Jingyun Li

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: This study employs the System Generalized Method of Moments (GMM) to analyze and test the impact of the central government's moderate collection of public service powers on local economic development. The results demonstrate that a 1 % increase in the degree of recentralization leads to a 1.2852 % improvement in local economic operational efficiency, confirming the necessity and significance of the central government's recentralization of public service responsibilities. Furthermore, the level of local economic development plays a positive moderating role in this relationship—higher levels of local economic development amplify the positive effect of recentralization on local economic operational efficiency. This study enriches the application of fiscal decentralization theory in the Chinese context and provides practical policy recommendations for achieving high-quality development and mitigating public risks under the "dual circulation" new development paradigm, holding significant theoretical and practical implications.

Keywords: Central and local government; Public services; Sharing mechanism; Central government's moderate collection of public service powers (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025007178

DOI: 10.1016/j.iref.2025.104554

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