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Fiscal Incentives, Public Spending, and Productivity – County-Level Evidence from a Chinese Province

In English

Författare

Summary, in English

This article develops a new empirical approach to analyze the potential link between fiscal decentralization and economic efficiency based on a stochastic frontier model with spatial error correction. Fiscal decentralization is not considered to be a source of growth in itself but an incentive scheme that impacts local governments’ spending as a means to improve investment conditions. Panel data for Zhejiang Province between1995 and 2005 indicate that revenue and expenditure

decentralization both promoted allocative efficiency. Yet, the impact of fiscal incentives decreases with rising income inequality among county governments.

Publiceringsår

2013

Språk

Engelska

Sidor

92-103

Publikation/Tidskrift/Serie

World Development

Volym

46

Dokumenttyp

Artikel i tidskrift

Förlag

Elsevier

Ämne

  • Other Social Sciences

Nyckelord

  • China
  • Spatial dependence
  • Public spending
  • Fiscal decentralization
  • Economic efficiency

Status

Published

ISBN/ISSN/Övrigt

  • ISSN: 1873-5991