Vertical Distribution of Fiscal Revenue and Its Effect on Balancing Economic Growth

摘要

, ,1994 , , , , , : Widening interregional disparity is an obstacle to China’s development and a serious latent threat to social stability. To alleviate conflicts that may arise from this disparity, the Chinese government established centrally-oriented vertical distribution of fiscal revenue following the 1994 tax-sharing reform. Through massive two-way funding flows, this vertical distribution has promoted the allocation of financial resources and equalization of fiscal capacity across regions. However, as an important institutional arrangement in decentralization, it has played a limited role in balancing interregional economic growth. This is mainly evident in the growth constraint on economically developed regions under large-scale revenue centralization. The effect of the vertical distribution of fiscal revenue clearly interacts with local reliance on non-tax revenue and the level of earmarked grant from the central government, with the former significantly weakening the anti-growth effect of excessive centralization of fiscal revenue and the latter markedly reducing the growth incentive of central government subsidies.View full textDownload full textKeywordsfiscal revenue, centralized tendency, balanced growthRelated var addthis_config = { ui_cobrand: "Taylor & Francis Online", services_compact: "citeulike,netvibes,twitter,technorati,delicious,linkedin,facebook,stumbleupon,digg,google,more", pubid: "ra-4dff56cd6bb1830b" }; Add to shortlist Link Permalink http://dx.doi.org/10.1080/02529203.2012.650415