China has been carrying out significant fiscal reforms on intergovernmental fiscal relations for over three decades. However, these reforms have largely concentrated on the revenue side of the budget, and generally have not been coordinated with an explicit strategy for the reform of functional...

This study examines how an important reform of local governance—village democracy—in the world’s most populous areas has affected the happiness of residents in rural China. We find that introducing elections per se has no significant impact. In comparison, direct nomination of local...

Minimum paid-in capital requirements impede firm entry. This study is among the first to examine the effectiveness of an entry deregulation reform in China that eliminated such requirements. We exploit city–month variation in reform implementation and employ a large nationwide administrative...

This study examines the tax compliance effect of changing the ownership structure of state-owned enterprises (SOEs) using a large dataset of Chinese industrial firms. By exploiting the variation in SOEs ownership change—oversight authority shifted from one level of government to either a lower...

This paper explores the incentive effects of total central fiscal transfers and its components -- tax rebates and equalization grants -- on provincial tax efforts in China. Our theoretical model predicts negative impacts on provincial tax efforts from both total fiscal transfers and equalization...

One of the oldest questions in the theory and practice of taxation is that of the appropriate mix of direct and indirect taxes. The choice between direct and indirect taxes has contributed to a long animated debate, in political and academic circles, regarding the virtues and defects of those...

The choice of the direct-indirect tax mix also is likely to have, as we review below, important consequences in other dimensions of the economy including macroeconomic stability, disparities in income distribution, and foreign direct investment flows. All those, including economic growth, will...