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Political determinants of intergovernmental transfers in a regionally decentralized authoritarian regime: evidence from China

Xin Wan, Yuanyuan Ma () and Kezhong Zhang

Applied Economics, 2015, vol. 47, issue 27, 2803-2820

Abstract: This article examines the political determinants of the allocation of intergovernmental transfers in the context of China. In a regionally decentralized authoritarian regime, a government marked by political centralization and fiscal decentralization, intergovernmental transfers are employed by politicians as instruments to achieve political goals. Using China's provincial data from 1994 to 2009, we find that the officials' political power is an important factor in the distribution process. A party secretary's replacement facilitates an increase in transfers, especially if the replacement comes from the central government. If a party secretary is a member of the Central Politburo, the province receives more conditional transfers than others. The central government allocates the transfers in such a way that the province with a high proportion of the minority population receives more transfers than others.

Date: 2015
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