The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India

Tao Zhang (taozhangcema@gmail.com) and Heng-Fu Zou (hzoucema@gmail.com)

No 30, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: The negative association between fiscal decentralization and provincial economic growth has been found to be consistently significant and robust in China. For India, however, we have found that fiscal decentralization is positively, and even statistically significantly, associated with state economic growth. The state allocation of public spending in various sectors is broadly consistent with ¡°growth maximizing,¡± whereas increases in the central allocation of its budget among development projects, nondevelopment projects, and social and community services by cutting the center's spending on all other functions can promote regional growth.

Keywords: Fiscal decentralization; Public spending; Growth; Chinese economy; Indian economy (search for similar items in EconPapers)
JEL-codes: E62 H2 H4 O4 R5 (search for similar items in EconPapers)
Date: 2000-08-04
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Citations: View citations in EconPapers (9)

Published in China Economic Review, Volume 12, Issue 1, Spring 2001, Pages 58-81

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Journal Article: The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India (2001)
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