Decentralized Taxation and the Size of Government: Evidence from Swiss State and Local Governments

According to the Leviathan Model, fiscal federalism is a binding constraint on revenue‐maximizing government. The competitive pressure of fiscal federalism reduces public sector size, as compared to unitary states. This study uses panel data of Swiss cantons from 1980 to 1998 to empirically analyze the effect of different instruments on government revenue and its structure. Because of the considerable tax autonomy of sub‐national Swiss governments, it is possible to investigate different mechanisms by which fiscal federalism may influence government size. The results indicate that tax exporting has a revenue‐expanding effect; whereas, tax competition favors a smaller size of government. Fragmentation has no robust effect on the size of government revenue for Swiss cantons. The overall effect of revenue decentralization leads to fewer tax revenues but higher user charges. Thus, revenue decentralization favors a smaller size of government revenue and shifts government revenue from taxes to user charges.     

Fiscal Decentralization or Centralization: Diverging Paths of Chinese Cities

If fiscal decentralization promotes growth, why do some regions decentralize more than others? This article identifies the growing divergence of fiscal centralization among Chinese cities and explains it in a public finance framework. It argues that fiscal decentralization and its economy‐liberalizing effect entail significant short‐term fiscal risk. The more a locality relies on uncompetitive business ownership for fiscal revenue, the less likely fiscal decentralization is to occur. This article compiles a dataset of 20 provincial capitals between 1999 and 2016 to test for the connection between a city's tax base and its fiscal centralization level. It then pairs two “most similar” cities to trace how fiscal security concerns drove their fiscal and economic policies apart. This article adds a micro‐level perspective to the literature on fiscal federalism. By pointing out the fiscal constraints confronting local governments, it offers a new angle to understand the different growth paths of Chinese cities.     

Financial Resource Base of Sub‐national Governments and Fiscal Decentralization in Ghana

Abstract: The past two decades have witnessed numerous attempts in developing countries at institutionalizing decentralization. Political leaders tended, before then, to believe that centralized planning was the key to economic growth and development. Ghana has not been excluded from this wave towards the transfer of power, competences, resources and functions from the centre to local levels of government. While Ghana has achieved significant political and administrative decentralization as well as decentralized planning, fiscal decentralization has been the unyielding component of the process. This paper examines the desirability, or otherwise, of fiscal decentralization in the context of funding arrangements. It uses the funding regime model as a basis for analysing how regulatory provisions, political and economic factors and practices, determine financial capacity of sub‐national governments. Evidence in the paper leads to the conclusion that sub‐national governments in Ghana do not support fiscal autonomy. They, instead, prefer being served and financed by the central government.     

Fiscal Decentralization and Economic Growth in China, 1994–2002

The question of whether fiscal decentralization has affected economic growth since the 1994 fiscal reform in China is interesting to both policy makers and economists. Using a simple model of endogenous growth that incorporates spending by different levels of government, and a panel data set for 30 provinces for the period of 1994–2002, this paper finds that fiscal decentralization contributes significantly to economic growth. This finding is consistent with the theoretical prediction that fiscal decentralization can increase economic efficiency. In addition, this paper attempts to investigate how the relationship between fiscal decentralization and provincial growth differs in the different regions considered. For this purpose, the 30 Chinese provinces and regions are categorized into three conventional economic belts that comprise the eastern, central, and western areas. This study finds that the effects of fiscal decentralization on economic growth vary among these three regions.     

“两型社会”经济运行制度研究——基于财政分权的视角

我国"两型社会"建设已由理论概念转变成现实行动,国家财政分权制度是促进经济快速增长和经济运行效率提高的一个重要因素。在财政分权与经济增长关系理论文献与经验研究进行回顾的基础上,分别从理论和实证角度证明:财政分权对经济增长的积极作用呈现边际递减;存在一个最优财政分权点(或者至少存在一个可判断的最优财政分权区间),与经济发展相协调,促进经济快速增长。在控制影响经济增长的其它变量后,得到68.58%是我国的最优财政分权点,这一结论也得到了现实的印证。希望这一结论在我国"两型社会"建设,经济发展方式转变和追求财政分权与集权的制度博弈中,给政府决策财政分权尺度提供有价值的建议。     

Keeping Up with the Jones': Decentralization,Policy Imitation,and Industrial Development in China

Decentralization is often hailed as a means of improving economic policy because it improves the flexibility of policy-making. This article explains why arguments in favor of decentralization, and in particular, theories of market-preserving federalism, may be overstated in this respect. Although economic decentralization may change the incentives of local officials overnight, the impact of local-center relations on the political and economic institutions of a locality is cumulative. The article uses the Chinese auto sector to demonstrate how local institutional arrangements hinder policy change despite decentralization. Local obstacles to change were only overcome by increased international competition.     

财政分权、空间外溢与区域经济增长

分税制改革以后,税收体系被划分为中央与地方两大部分,正式建立起以分税制为中心的财政分权体制。各地区的财政分权程度不仅对本地经济增长有直接影响,还对其他地区的经济增长有间接影响,即存在空间溢出效应。利用我国2005年至2018年31个省（市、自治区）的面板数据,运用空间面板模型,估计和检验财政分权对经济增长的空间效应。研究结果表明：各地区的财政分权不仅促进本地经济增长,还对其他地区的经济增长有显著正向溢出效应。     

财政分权、劳动保护与劳动收入占比

当前中国劳动收入占比变动与地方政府的政治经济行为决策有着很大的关系,地方政府放松对劳动的保护在相当程度造成了劳动收入在初次分配中的比重持续走低。本文基于省级数据,运用动态面数据的GMM方法着重考察和检验了财政分权驱动下放松劳动保护对劳动收入占比下降的影响,其中一个重要机理是,在财政分权的激励下,地方政府可能放松对劳动的保护并将其作为引资“优惠政策”和争取本地选民的重要手段,而这在一定程度上影响着劳动者应获得的劳动报酬及福利。实证结果表明,财政分权对劳动收入占比产生了显著的负面效应,而财政分权正是通过弱化劳动保护进行传导进而影响到劳动收入占比,因而财政分权能够在很大程度上显著地决定着劳动收入占比的变动,此外,2005年以来所实施的有利于改善劳工保护的系列政策产生了较好的经济效果。最后,本文在此基础上提出了相应的政策建议。     

Fiscal decentralization and environmental pollution: Evidence from Chinese panel data

China's environmental pollution casts a shadow on its economic success. Concerning fiscal decentralization, China introduced the rule-based tax assignment system in 1994. To avoid the structural change in underlying fiscal regimes, we use the provincial panel data during the period 1995–2010. We find that fiscal decentralization has no significant effect on environmental pollution as it is measured per capita emission of wastewater, waste gas or solid waste in system GMM (Generalized method of moments) estimation. Our results are robust when we use different measures of fiscal decentralization. We further find that fiscal decentralization has a significant, positive effect on pollution abatement spending and pollutant discharge fees, which indicates possible mechanisms for fiscal decentralization to help protect the environment.     

分权式改革对经济增长影响的实证研究

中国的分权式改革是财政分权、行政分权和经济分权的三重分权过程,仅仅选择单一维度的分权指标,无法准确确认分权的经济增长效应。通过构建分权的多维衡量指标体系,并以1998-2011年省级面板数据为样本,全面分析了分权式改革对经济增长的影响。实证结果显示:分权整体上促进了地方经济增长,但不同维度的分权对经济增长的影响效应并不相同。此外,分权对经济增长的影响还存在显著的地区差异,东部地区分权的经济增长优势高于中西部地区。     

Development of interbudgetary relations in Russia in 2000–2015

The system of interbudgetary relations in Russia has been analyzed. The evolution of the Russian policy of fiscal federalism in 2000–2015 and the imperfection of tools of this policy have been considered based on official records. Changes in the rules of redistribution of budgetary resources at the regional level are proposed. In our opinion, these changes should stimulate regions in order to increase their budget revenues. Calculations that show the budgetary effects of the proposed approach have been presented.     

财政分权、经济增长与外贸依存度——基于1978～2007年改革开放30年数据的实证分析

本文以我国1978～2007年的数据,运用协整、Granger因果检验、脉冲响应函数研究了我国财政分权、经济增长对外贸依存度的动态影响。研究发现:长期内,财政分权会推进外贸依存度的提高,而短期内财政分权对外贸依存度的作用不显著;以人均GDP衡量的经济增长,在短期内可提高外贸依存度水平,而在长期中却会降低外贸依存度。分析表明,财政分权引致的地方政府为经济增长而产生的对FDI和出口的激励,以及贸易升级、产业结构调整、内需导向型经济增长模式,是财政分权、经济增长和外贸依存度之间动态关系产生的内在逻辑。     

Fiscal incentives,competition, and investment in China

This paper explores how fiscal incentives offered to local governments in China affect investment rates in their jurisdictions. Theoretically, we build a simple fiscal competition model to establish the linkage between local fiscal incentives and expenditure policy and consequently, capital movement. The key prediction of the model, borne out by data from Chinese provinces spanning 2004–2013, is that an increase in the local corporate income tax-sharing ratio, which proxies fiscal incentives offered to local governments, motivates local governments to compete for capital investment through increased public expenditure. Our results contribute to the literature on both fiscal federalism and state capacity by showing that local fiscal incentives significantly shape policy choices and local economic performance. In addition, by exploring fiscal incentives offered to local governments, we offer a novel explanation for the unusually high investment rate in China that has been sustained over a prolonged period.     

财政分权与经济增长

理解财政分权在经济增长过程中所起的作用颇为重要。本文采用1953～2003年的时间序列数据,以地方政府财政支出占全部财政支出的比重作为度量财政分权的指标,用实证研究的办法考察财政分权对于中国经济增长的影响。与已有的一些研究结果不同的是,本文的回归结果显示,对经济增长具有显著影响的并不是财政分权的绝对水平,而是财政分权程度的变动。本文依据这一结果分析了财政分权与经济增长的关系。     

财政分权、金融分权与科技创新

央地间分权改革是我国调节不同层级政府间权责关系的一项制度探索,对于强化地方政府创新职能具有重要意义。文章基于我国城市面板数据,实证分析了财政与金融分权制度改革对科技创新的影响。研究发现,财政分权与金融分权均能有效促进城市创新,并且这种影响具有显著的时空异质性特征。动态分析发现,随着城市创新水平的提升,两种分权制度对城市创新的影响也存在着差异化的动态变化轨迹。此外,实证分析结果也表明,我国财政分权制度改革与金融分权制度改革的匹配性较差,两类分权制度缺乏有效协同。因此,在有序推动分权制度改革的同时,要提高财政与金融两个领域分权制度的匹配性,最大化分权制度改革对创新型经济发展的促进作用。     

Fiscal decentralization, revenue and expenditure assignments, and growth in China

Theory suggests that a close match between revenue and expenditure assignments at sub-national levels benefits allocative efficiency, and hence economic growth. That is, a convergence of revenue and expenditure assignments at sub-national levels of government should, according to the theory, be positively associated with a higher growth rate. In the case of China, this paper shows, divergence, rather than convergence, in revenue and expenditures at the sub-national level of government is associated with higher rates of growth. A panel dataset for 30 provinces in China is used to examine the relationship between fiscal decentralization and economic growth over two phases of fiscal decentralization in China: (1) 1979–1993 under the fiscal contract system, and (2) 1994–1999 under the tax assignment system. The seeming contradiction between the theory and evidence in the China case is reconciled by taking into account the institutional arrangements that prevailed during the two phases of fiscal decentralization, in particular the inconsistency between the assumptions of the theory of fiscal decentralization and the institutional reality of China.     

Regional Decentralization, Fiscal Incentives and Privatization of Public-Owned Enterprises

I. IntroductionThe regional decentralization reform, which was initiated in China in the early 1980s, hasgreatly heightened the enthusiasm of local governments to develop the local economy.This is mainly because decentralization transferred some of the power from the centralgovernment to local governments, which, as a result, began to shoulder the function oflocal economic management. The central government is also restricted from too muchintervention in local economic affairs. Meanwhile, the…     

Deficit Estimation and Welfare Effects after the 1994 Fiscal Reform in China： Evidence from the County Level

Using simple statistical analysis of count-level budgetary data from across all of China＇s counties, the present paper examines whether the post-1994 fiscal decentralization has affected redistribution at the count-level. The new fiscal system has been less able to narrow inter-county dispersion in ftscal imbalances than the old one, even after taking intergovernmental transfer payments into account. Although with the post-1994 system there has been a modest increase in per capita welfare spending in all counties on average, much of the new-found fiscal resources have been spent on salary and administrative expenses rather than spending on public goods. Therefore, it is imperative that the reform of China＇s tax system is intensified.     

Foreign direct investment,fiscal decentralization and land conflicts in China

Land disputes have been an important risk to social stability in China since the turn of the century. This paper uses provincial data on illegal land uses during the period 1999–2010 as a proxy for the intensity of land conflicts to investigate the effects of foreign direct investment (FDI) and fiscal decentralization on jurisdictional land conflicts. The results show that the FDI growth rate has a positive and significant impact on the growth rate of illegal land use when there is a high degree of fiscal decentralization. We thus provide evidence supporting the hypothesis that regional competition for FDI, as shaped by fiscal decentralization, tends to raise conflicts over land in China.     

我国近现代财政体制演进轨迹及其现实框架

我国近现代财政形态,可归纳为从帝国财政崩溃走向公共财政建立的过程。在这个过程中大一统财政体制逐渐瓦解,分级分税财政体制经历了漫长的探索,逐步融入与先发现代化国家趋同的财政联邦主义改革方向。我国有必要建立宪政化、法治化的财政体制框架,在社会监督下形成政府间稳定的法律关系,使财政体制成为社会进步的重要支柱性制度之一。