Fiscal Decentralization and Economic Growth in China

Conference Paper No. D01, 4th Annual International Conference on Transition Economics

Posted: 8 Mar 2000

See all articles by Justin Y. Lin

Justin Y. Lin

Peking University - China Center for Economic Research

Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics

Date Written: December, 1998

Abstract

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

Lin, Justin Yifu and Liu, Zhiqiang, Fiscal Decentralization and Economic Growth in China (December, 1998). Conference Paper No. D01, 4th Annual International Conference on Transition Economics, Available at SSRN: https://ssrn.com/abstract=215228

Justin Yifu Lin (Contact Author)

Peking University - China Center for Economic Research ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Zhiqiang Liu

SUNY at Buffalo, College of Arts & Sciences, Department of Economics ( email )

Buffalo, NY 14260
United States

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