Fiscal Decentralization and Economic Growth in China
Conference Paper No. D01, 4th Annual International Conference on Transition Economics
Posted: 8 Mar 2000
Date Written: December, 1998
We employ a province-level data set to assess the contribution of fiscal decentralization initiated in the 1980s to economic growth in China. Controlling for other concurrent reform measures, we find that fiscal decentralization has raised the growth rate of per capita GDP at the province level. This is consistent with the hypothesis that fiscal decentralization increases economic efficiency. In addition, we also find that the rural reform, non-state sector development, and capital accumulation are the key driving forces of the impressive growth in China over the past twenty or so years.
JEL Classification: P21
Suggested Citation: Suggested Citation