Determinants of expenditure decentralization: Evidence from China

Muluan Alfred WU, Wen WANG

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44 Citations (Scopus)


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
Early online dateMar 2013
Publication statusPublished - Jun 2013


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


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


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