Fiscal Decentralization and Provincial-Level Fiscal Disparities in China: A Sino-U.S. Comparative Perspective

Authors


Zhirong Jerry Zhao is an assistant professor at the Hubert H. Humphrey Institute of Public Affairs, University of Minnesota. He teaches budgeting, accounting, and financial management in both public and nonprofit sectors. His research areas include public budgeting, state and local public finance, infrastructure finance,and public management.
Email:zrzhao@umn.edu

Abstract

Since China’s 1994 fiscal reform, increasing concerns have been voiced about fiscal disparities across the country. Can local governments fairly and effectively fulfill basic public services such as primary education, public health, and social welfare? This essay traces the evolution of intergovernmental relations in China since 1978. The fluctuation of provincial level fiscal distribution over time and the underlying factors behind fiscal inequality, as compared to a decentralized American revenue system, are analyzed. The author, Zhirong Jerry Zhao of the University of Minnesota, argues for additional research on alternative measures of local fiscal capacity.

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