Fiscal Reform and Public Education Spending: A Quasi-natural Experiment of Fiscal Decentralization in China
Since the 1990s, China has pushed forward the province-managing-county (PMC) reform in some provinces as an experiment of fiscal decentralization. The reform provides a good opportunity to examine the impact of fiscal decentralization on fiscal behaviors of local governments in China. Using a data set of 108 counties in Henan Province during 1999--2008, we employ a difference-in-differences approach to investigate how the PMC reform affects local public education spending. The results show that counties given additional fiscal autonomy tend to spend a lower share of their annual expenditures on public education than other counties do. The findings suggest that fiscal decentralization does not necessarily make local governments more responsive to long-term benefits for local residents. Copyright 2012, Oxford University Press.
Year of publication: |
2012
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Authors: | Wang, Wen ; Zheng, Xinye ; Zhao, Zhirong |
Published in: |
Publius: The Journal of Federalism. - Oxford University Press, ISSN 0048-5950. - Vol. 42.2012, 2, p. 334-356
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Publisher: |
Oxford University Press |
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