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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2009, Vol. 4 Issue (3) : 406-424
Research articles |
Impact of fiscal transfer on fiscal effort of Chinese provincial governments
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Abstract An ideal scheme of intergovernmental transfer should be determined by equalization and efficiency with taking account of fiscal effort of local governments. In this regard, this paper provides a comprehensive review of Chinese transfer system since the decentralized taxation system (DTS) starting from 1994. To begin with, we make numerical analysis on equalization in economic and fiscal aspects since the 1994 DTS reform. A Panel Data model is then developed to analyze correlations between each of three types of transfer and fiscal effort of provincial governments based on Chinese experience during 1994–2006. The authors further research respective situation of eastern, middle and western parts of China and finally draw a conclusion through the above analysis that the current fiscal transfer system does not tangibly contribute towards improving fiscal effort devoted by local governments. In addition to that, it even has a somewhat counter-equalizing effect.
Keywords fiscal transfer      fiscal effort      equalization      
Issue Date: 05 September 2009
 Cite this article:   
. Impact of fiscal transfer on fiscal effort of Chinese provincial governments[J]. Front. Econ. China,2009, 4(3): 406-424.
[1] Zili Yang. Transfers and the Samuelson Rule in Stock Externality Provision—Why Do We Need Them Both?[J]. Front. Econ. China, 2016, 11(1): 88-103.
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