The Dynamic Impact of Agricultural Fiscal Expenditures and Gross Agricultural Output on Poverty Reduction: A VAR Model Analysis

Guanglu Zeng, Chenggang Zhang, Sanxi Li and Hailin Sun
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Guanglu Zeng: School of Economics and Management, Changsha University, Changsha 410022, China
Chenggang Zhang: Department of Sociology, Tsinghua University, Beijing 100084, China
Sanxi Li: School of Economics, Renmin University of China, Beijing 100872, China
Hailin Sun: The Institute for Social Governance and Development, Tsinghua University, Beijing 100084, China

Sustainability, 2021, vol. 13, issue 11, 1-13

Abstract: China was the first developing country to achieve the poverty eradication target of the 2030 Agenda for Sustainable Development Goals (SDG) 10 years ahead of schedule. Its past approach has been, mainly, to allocate more fiscal spending to rural areas, while strengthening accountability for poverty alleviation. However, some literature suggests that poor rural areas still lack the endogenous dynamics for sustainable growth. Using a vector autoregression (VAR) model, based on data from 1990 to 2019, we find that fiscal spending plays a much more significant role in reducing the poverty ratio than agricultural development. When poverty alleviation is treated as an administrative task, each poor village must complete the spending of top-down poverty alleviation funds within a time frame that is usually shorter than that required for successful specialty agriculture. As a result, the greater the pressure of poverty eradication and the more funds allocated, the more poverty alleviation projects become an anchor for accountability, and the more local governments’ consideration of industry cycles and input–output analysis give way to formalism, homogeneity, and even complicity. We suggest using the leverage of fiscal funds to direct more resources to productive uses, thus guiding future rural revitalization in a more sustainable direction.

Keywords: agricultural fiscal expenditure; gross agricultural output; poverty reduction; rural vitalization; sustainable development (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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