Leaving No One Behind: China's Central-Local Governments and Corporate Tripartite Collaboration to Reduce Poverty

Abstract

We examine China's poverty-reduction policy in a hierarchical central-local-corporation tripartite collaboration framework. In 2013, China's central government initiated the Targeted Poverty Alleviation program to reduce poverty. Local governments first collected and recorded detailed individual information on the impoverished in a "poverty registration"; then, they took action to reduce the impoverished population. To accelerate the pace of poverty reduction, in 2019, the central government permitted full tax deductions for corporate spending on poverty-reduction from the poverty registration. Corporate anti-poverty spending increased: central-government-owned SOEs donated more than local-government-owned SOEs. Private companies donated the least. Furthermore, corporate spending was higher in locations where local tax revenue was greater and when the central government could more readily monitor a firm's support (when a firm had a greater analyst following or a presence in Beijing). Our empirical work shows that firm-level efforts significantly reduced poverty, while most government public spending did not.

Keywords: JEL Classification: I38, H71 central-local-governments and firm collaboration, poverty alleviation, corporate antipoverty spending, tax deductions

JEL Classification: I38, H71