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The Centre Decides and the Local Pays: Mandates and Politics in Local Government Financial Management in China

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  • Yongmao Fan

Abstract

In China, ‘the centre decides and the local pays’ means the central government decides on policies but requires its local subordinates to provide the financial resources. The politics of this practice implies that local government has to take different strategies to cope with the unfunded mandates with various consequences. As an empirical study framed by Niskanen’s rational choice theory and Dunleavy’s ‘bureau-shaping’ model, this paper examines how the unfunded mandates impact local government behaviour. Its main focus is the question of how the local officials respond, the extent to which they comply or resist and the techniques they use to adapt to these mandates. This paper finds when deciding how to pay the bill for the centre, local officials have to take a number of principles into consideration. They need to stick to the people-orientated principle and to finance money for salaries and operation to the extent that they can; they also have to see if the mandates are strictly implemented or popular among local people.

Suggested Citation

  • Yongmao Fan, 2015. "The Centre Decides and the Local Pays: Mandates and Politics in Local Government Financial Management in China," Local Government Studies, Taylor & Francis Journals, vol. 41(4), pages 516-533, July.
    • Handle: RePEc:taf:flgsxx:v:41:y:2015:i:4:p:516-533
    DOI: 10.1080/03003930.2014.968706
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    Cited by:

    1. Hao Shi & Bing Ye, 2024. "Unfunded mandates and taxation," Fiscal Studies, John Wiley & Sons, vol. 45(1), pages 77-106, March.
    2. Blane D. Lewis & Hieu T. M. Nguyen, 2018. "Policy failure and educational attainment in Indonesia," Departmental Working Papers 2018-17, The Australian National University, Arndt-Corden Department of Economics.
    3. Huang, Yanfen & Zhang, Chao & Liu, Wei, 2019. "Who drives the formation and adoption of the "increasing versus decreasing balance policy"?—Evidence from a policy process analysis," Land Use Policy, Elsevier, vol. 80(C), pages 175-184.

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