Sharing Governance Costs with Society: Case Studies in Zhejiang

Zhe Ren

No 960, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This article explores the "reverse soft budget constraint" in Zhejiang, China, where local governments shift their financial burdens to enterprises and communities to exceed fiscal limits. Six case studies examine cost transfer mechanisms among rural, urban, and non-urbanized communities. The analysis emphasizes the negotiation dynamics between local governments and communities, indicating that rural communities with independent revenue sources are more susceptible to cost transfers. In contrast, urban communities rely entirely on government funding, which restricts their autonomy. The study contrasts cost transfer characteristics in coastal regions with higher economic development vis-a-vis those in inland regions.

Keywords: Financial; burden|Cost; Transfer|Local; government|China (search for similar items in EconPapers)
JEL-codes: K11 K42 O30 R52 (search for similar items in EconPapers)
Date: 2025-03
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Published in IDE Discussion Paper = IDE Discussion Paper, No.960. 2025-10

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