Interpretation of Chinese Fiscal Decentralization：Contracts’ Structure and Economic Effects
Read
DownLoad |
| Title | Interpretation of Chinese Fiscal Decentralization：Contracts’ Structure and Economic Effects
|
| Author | Lv Bingyang and Hu Shen |
| Organization | Renmin University of China |
| Email | lby@ruc.edu.cn；sillytender@163.com |
| Key Words | fiscal decentralization; information asymmetry; multi-decision-making；economic growth |
| Abstract | The typical feature of China's fiscal decentralization since 1949 is the elasticity of the financial revenue maintaining by the central authority. This paper under the framework of contract analysis, brings information asymmetry and multi-decision-making into fiscal decentralization study and puts forward three propositions: Fiscal decentralization level when decided by the central government is based on the preference of those aims: economic development，livehood improvement，the revenue of the central government controlling force to the local government. The fiscal decentralization level is affected by the elasticity of the output, cost, externality and uncertainty of the local government. The central and local government’s positivity is related to the fiscal decentralization level ,their targets，the elasticity of the output and the externality caused by their behavior. In simple terms, fiscal decentralization is the balance between the central government’s leadership and the local government’s positivity. Combining the results of theoretical analysis, this paper explains in detail the internal logic of fiscal decentralization in China, its impact on government behavior and economic growth, and the premise of Chinese fiscal decentralization. This paper puts forward a logical and systematic explanation of Chinese fiscal decentralization. |
| Serial Number | WP1452 |
| Time | 2019-12-26 |
|