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Fiscal Incentives, Public Spending, and Productivity – County-Level Evidence from a Chinese Province

Brehm, Stefan LU (2013) In World Development 46. p.92-103
Abstract
This article develops a new empirical approach to analyze the potential link between fiscal decentralization and economic efficiency based on a stochastic frontier model with spatial error correction. Fiscal decentralization is not considered to be a source of growth in itself but an incentive scheme that impacts local governments’ spending as a means to improve investment conditions. Panel data for Zhejiang Province between1995 and 2005 indicate that revenue and expenditure

decentralization both promoted allocative efficiency. Yet, the impact of fiscal incentives decreases with rising income inequality among county governments.
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
China, Spatial dependence, Public spending, Fiscal decentralization, Economic efficiency
in
World Development
volume
46
pages
92 - 103
publisher
Elsevier
external identifiers
  • wos:000318392600007
  • scopus:84876438792
ISSN
1873-5991
DOI
10.1016/j.worlddev.2013.01.029
language
English
LU publication?
yes
id
ee67dcc3-989f-44de-aa5a-e5b5fbd2428c (old id 3449945)
date added to LUP
2016-04-01 10:24:50
date last changed
2022-02-10 01:54:34
@article{ee67dcc3-989f-44de-aa5a-e5b5fbd2428c,
  abstract     = {{This article develops a new empirical approach to analyze the potential link between fiscal decentralization and economic efficiency based on a stochastic frontier model with spatial error correction. Fiscal decentralization is not considered to be a source of growth in itself but an incentive scheme that impacts local governments’ spending as a means to improve investment conditions. Panel data for Zhejiang Province between1995 and 2005 indicate that revenue and expenditure<br/><br>
decentralization both promoted allocative efficiency. Yet, the impact of fiscal incentives decreases with rising income inequality among county governments.}},
  author       = {{Brehm, Stefan}},
  issn         = {{1873-5991}},
  keywords     = {{China; Spatial dependence; Public spending; Fiscal decentralization; Economic efficiency}},
  language     = {{eng}},
  pages        = {{92--103}},
  publisher    = {{Elsevier}},
  series       = {{World Development}},
  title        = {{Fiscal Incentives, Public Spending, and Productivity – County-Level Evidence from a Chinese Province}},
  url          = {{http://dx.doi.org/10.1016/j.worlddev.2013.01.029}},
  doi          = {{10.1016/j.worlddev.2013.01.029}},
  volume       = {{46}},
  year         = {{2013}},
}