Determinants of expenditure decentralization: Evidence from China

Muluan Alfred WU, Wen WANG

Research output: Contribution to journalArticles

25 Citations (Scopus)

Abstract

This study is the first attempt to examine the determinants of expenditure decentralization at sub-provincial levels in China. The Chinese central government gives detailed guidelines to local governments on public finance, but, ironically, their expenditure assignment is far from being well-regulated. Differences in fiscal decentralization on the expenditure side are enormous among local governments. Employing a panel dataset of 1995–2006, we provide empirical evidence that transfer dependency negatively affects expenditure decentralization in Chinese local governments. It suggests that intermediate governments, i.e., provincial governments, may have "grabbed" central grants for self-interests. Copyright © 2013 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)176-184
JournalWorld Development
Volume46
Early online dateMar 2013
DOIs
Publication statusPublished - Jun 2013

Citation

Wu, A. M., & Wang, W. (2013). Determinants of expenditure decentralization: Evidence from China. World Development, 46, 176-184.

Keywords

  • Decentralization
  • Local government
  • Intergovernmental relations
  • Fiscal transfers
  • China

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