IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v73y2021ics1049007821000117.html
   My bibliography  Save this article

How to explain the inverted U-shaped curve of tax centralization in China?

Author

Listed:
  • Fang, Hongsheng
  • Guo, Lin
  • Shuai, Wenjun
  • Dong, Ye

Abstract

This paper uses popular approaches to measure fluctuations in tax centralization and the decomposition of changes in tax centralization to explain the inverted U-shaped curve of tax centralization in China. The results show that 1) during the 2002–2007 period, the within-sector effect played a dominant role in the increase in tax centralization and 2) during the 2008–2016 period, the between-sector effect was the main reason for the continued decline in tax centralization. To avoid this continued decline in tax centralization, we argue that the central government should ensure that the within-sector tax centralization of other services is not lower than that of the industry sector.

Suggested Citation

  • Fang, Hongsheng & Guo, Lin & Shuai, Wenjun & Dong, Ye, 2021. "How to explain the inverted U-shaped curve of tax centralization in China?," Journal of Asian Economics, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:asieco:v:73:y:2021:i:c:s1049007821000117
    DOI: 10.1016/j.asieco.2021.101282
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049007821000117
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.asieco.2021.101282?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daniele Coen-Pirani & Michael Wooley, 2018. "Fiscal Centralization: Theory and Evidence from the Great Depression," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 39-61, May.
    2. Han, Li & Kung, James Kai-Sing, 2015. "Fiscal incentives and policy choices of local governments: Evidence from China," Journal of Development Economics, Elsevier, vol. 116(C), pages 89-104.
    3. Hongsheng Fang & Wenjun Shuai & Linhui Yu & Jun Zhang, 2019. "Is fiscal revenue concentration ratio in China too high?," The World Economy, Wiley Blackwell, vol. 42(7), pages 1932-1960, July.
    4. Panizza, Ugo, 1999. "On the determinants of fiscal centralization: Theory and evidence," Journal of Public Economics, Elsevier, vol. 74(1), pages 97-139, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Koomin Kim, 2023. "How gubernatorial budgetary power and interest groups affect vertical fiscal imbalances in the US states: Focusing on fiscal centralization and decentralization," Public Budgeting & Finance, Wiley Blackwell, vol. 43(2), pages 53-81, July.
    2. Lyu, Bingyang & Ma, Guangrong & Zhan, Jingnan, 2022. "The trade-off between risk and incentives in fiscal federalism: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 1019-1035.
    3. Schakel, Arjan Hille, 2009. "A Postfunctionalist Theory of Regional Government," MPRA Paper 21596, University Library of Munich, Germany.
    4. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    5. Aristovnik, Aleksander, 2012. "Fiscal decentralization in Eastern Europe: a twenty-year perspective," MPRA Paper 39316, University Library of Munich, Germany.
    6. Roger Congleton & Andreas Kyriacou & Jordi Bacaria, 2003. "A Theory of Menu Federalism: Decentralization by Political Agreement," Constitutional Political Economy, Springer, vol. 14(3), pages 167-190, September.
    7. Jorge Martinez-Vazquez & Ming-Hung Yao, 2009. "Fiscal Decentralization and Public Sector Employment: A Cross-Country Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0903, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    8. Wenke Wang & Xiaoqiong You & Kebei Liu & Yenchun Jim Wu & Daming You, 2020. "Implementation of a Multi-Agent Carbon Emission Reduction Strategy under the Chinese Dual Governance System: An Evolutionary Game Theoretical Approach," IJERPH, MDPI, vol. 17(22), pages 1-21, November.
    9. Lu, Shenghua & Wang, Hui, 2023. "How revolving-door recruitment makes firms stand out in land market: Evidence from China," China Economic Review, Elsevier, vol. 78(C).
    10. Andreas P. Kyriacou & Oriol Roca-Sagalés, 2019. "Local Decentralization and the Quality of Public Services in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(2), pages 755-776, September.
    11. Yang, Xiaoliang & Barros, Lucy & Matthews, Kent & Meenagh, David, 2024. "The dynamics of redistribution, inequality and growth across China’s regions," Journal of Policy Modeling, Elsevier, vol. 46(3), pages 613-637.
    12. Tobias Arnold & Sean Mueller & Adrian Vatter, 2021. "Shock or Design: What Drives Fiscal De/Centralization? A Comparative Analysis of Twenty-Nine OECD Countries, 1995–2017," Publius: The Journal of Federalism, CSF Associates Inc., vol. 51(1), pages 1-26.
    13. Ding, Haoyuan & Ni, Bei & Xue, Chang & Zhang, Xiaoyu, 2022. "Land holdings and outward foreign direct investment: Evidence from China," Journal of International Money and Finance, Elsevier, vol. 124(C).
    14. Lorena Viñuela, 2014. "Trends and Quality of Decentralized Public Investment," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1407, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    15. Tranchant Jean-Pierre, 2016. "Is Regional Autonomy a Solution to Ethnic Conflict? Some Lessons from a Dynamic Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(4), pages 449-460, December.
    16. Monica Escaleras & Charles Register, 2012. "Fiscal decentralization and natural hazard risks," Public Choice, Springer, vol. 151(1), pages 165-183, April.
    17. Alberto Alesina, 2002. "The Size of Countries: Does it Matter?," Harvard Institute of Economic Research Working Papers 1975, Harvard - Institute of Economic Research.
    18. Wen, Qiang & Zhang, Teng, 2022. "Economic policy uncertainty and industrial pollution: The role of environmental supervision by local governments," China Economic Review, Elsevier, vol. 71(C).
    19. Cheng, Yudan & Jia, Shanghui & Meng, Huan, 2022. "Fiscal policy choices of local governments in China: Land finance or local government debt?," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 294-308.
    20. Samuele Murtinu & Giulio Piccirilli & Agnese Sacchi, 2016. "Fiscal Policy, Government Polarization, and the Economic Literacy of Voters," Working papers 50, Società Italiana di Economia Pubblica.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:73:y:2021:i:c:s1049007821000117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.