Redistribution and Government Tactical Behaviour: An Analysis of Local Public Expenditure in China after the 1994 Tax Reform

摘要

Turing the last few decades, significant changes have affected Chinese public finance. In 1994, a major tax reform was undertaken to provide adequate resources to different levels of government, eliminate the main distortions of the tax structure and revamp central-local sharing arrangements. The evolutions and the determinants of regional public expenditures in the years following the reform deserve to be analysed. Redistribution has become an increasing concern for the Chinese government. China is now one of the major players in the world economic scene, but notwithstanding the exceptional performances experienced in the last years, not all the Chinese regions were equally involved in the development process and not all citizens within each region enjoyed the advantages of economic growth. As a result, income inequality among and within regions has risen during the last decades.