Provincial Public Expenditure in China: A Tale of Profligacy

Jean-Louis Combes, Mary-Françoise Renard () and Sampawende Jules Tapsoba
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Mary-Françoise Renard: CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique
Sampawende Jules Tapsoba: FMI - Fonds monétaire international - FMI - International Money Fund

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Abstract: This paper examines the cyclicality of provincial expenditure in China during the period 1978-2013. We assess whether provincial expenditure has been pro-cyclical using panel data for our analysis. Profligacy is found to be a regular feature of provincial fiscal policy. This profligacy occurs both in good and bad times and has markedly increased since 1994 with the increased autonomy of provinces. We further find that the profligacy bias is mitigated when financial constraints are relaxed, the remaining political life of the governor is long, government efficiency is strong, corruption incidence is low, and governments are large.

Keywords: China; Fiscal cyclicality; regional growth (search for similar items in EconPapers)
Date: 2015-10-19
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01217332
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Working Paper: Provincial Public Expenditure in China: A Tale of Profligacy (2015)
Working Paper: Provincial Public Expenditure in China: A Tale of Profligacy (2015)
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