Fiscal Decentralization, Budgetary Transparency, and Local Government Size in China

Shujian Zhang

Emerging Markets Finance and Trade, 2016, vol. 52, issue 7, 1679-1697

Abstract: This article makes use of panel data for 31 provinces between 1985 and 2010 and specifies a dynamic panel model to investigate the determinants of local government size in China and achieved several conclusions: (1) the fiscal decentralization since TSS reform in 1994 has increased the local government size; (2) budgetary transparency has a U-shape nonlinear effect on local government size; (3) fiscal revenue is the important factor to drive the overexpansion of local government size in China; and (4) local government size has a strong dependence of past path.

Date: 2016
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DOI: 10.1080/1540496X.2016.1142213

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