Is China a Leviathan?

52 Pages Posted: 3 Mar 2008

See all articles by Z. Zhu

Z. Zhu

Chinese Academy of Sciences (CAS) - Shenyang National Laboratory for Materials Science

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: December 19, 2005

Abstract

(Last revised version December 2005) To address the problem why China, as a communist country, moves in the opposite direction when the public sector has undergoing a continuous growth in most Western economies since the World War II, we offer a new approach that the de facto fiscal decentralization curtails government size in transition China in addition to conventional explanations. Meanwhile, by analyzing panel data and various variables used by previous empirical studies, this paper tests the Leviathan hypothesis for vertical decentralization, horizontal fragmentation and intergovernmental collusion at central-provincial and provincial-local level. Our empirical results not only explain Chinese shrinking government size, but also lend support to Leviathan hypothesis, especially, under the condition of the absence of traditional democratic electoral constraint.

Keywords: China, Fiscal Decentralization, Transition Economy, Leviathan

Suggested Citation

Zhu, Z. and Krug, Barbara, Is China a Leviathan? (December 19, 2005). ERIM Report Series Reference No. ERS-2005-087-ORG. Available at SSRN: https://ssrn.com/abstract=1100789

Z. Zhu (Contact Author)

Chinese Academy of Sciences (CAS) - Shenyang National Laboratory for Materials Science

52 Sanlihe Rd.
Datun Road, Anwai
Beijing, Xicheng District 100864
China

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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