Intergovernmental Fiscal Arrangements and Provincial Consumption Risk Sharing in China

Jennifer Lai, Erin P.K. So and Isabel K.M. Yan

Emerging Markets Finance and Trade, 2014, vol. 50, issue 3, 45-58

Abstract: This paper utilizes a panel data set on two major fiscal reforms in China—the fiscal contract system (FCS) in 1980-93 and the tax-sharing system (TSS) after 1994—to examine how the various aspects of intergovernmental fiscal arrangement affect the ability of the fiscal system to facilitate risk sharing. The high revenue decentralization and the proliferation of extrabudgetary revenue items in the FCS generally weakened the central government's ability to support interprovincial risk sharing. This situation was reversed in the TSS period. In addition, the effect of central-to-local transfer (transfer-in) and local-to-central transfer (transfer-out) on risk sharing was asymmetric in the sense that transfer-out enhances risk sharing but transfer-in does not.

Keywords: divergence and convergence of fiscal decentralization; fiscal decentralization; fiscal reform; intergovernmental fiscal relations; provincial consumption risk sharing; transfer system (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=N3415445H5151100 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:50:y:2014:i:3:p:45-58

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().