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Should China revisit the 1994 fiscal reforms?

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  • Ahmad, Ehtisham

Abstract

The 1994 reforms in China were remarkably successful in stabilizing the economy and raising revenues for the benefit of sustainable growth and permitting the central government to redistribute resources to poorer regions through an equalization framework. However, the rise of informal local borrowing in the absence of effective own-source revenues raises possible risks and imbalances in the future. There is thus a need to reconsider the fundamentals of intergovernmental fiscal relations, building on the basis laid in the 1994 reforms.

Suggested Citation

  • Ahmad, Ehtisham, 2011. "Should China revisit the 1994 fiscal reforms?," Discussion Papers 115922, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:115922
    DOI: 10.22004/ag.econ.115922
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    References listed on IDEAS

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    1. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521265638, November.
    2. Lili Liu, 2010. "Strengthening Subnational Debt Financing and Managing Risks," World Bank Publications - Reports 19471, The World Bank Group.
    3. International Monetary Fund, 2004. "Toward More Effective Redistribution: Reform Options for Intergovernmental Transfers in China," IMF Working Papers 2004/098, International Monetary Fund.
    4. Howell H. Zee & Farhan Hameed, 2006. "Reforming China's Personal Income Tax," Chinese Economy, Taylor & Francis Journals, vol. 39(2), pages 40-56, April.
    5. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    6. Mr. Raju J Singh & Mr. Ben Lockwood & Mr. Ehtisham Ahmad, 2004. "Taxation Reforms and Changes in Revenue Assignments in China," IMF Working Papers 2004/125, International Monetary Fund.
    7. Yingyi Qian & Barry R. Weingast, 1996. "China's transition to markets: market-preserving federalism, chinese style," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(2), pages 149-185.
    8. Qiao, Baoyun & Martinez-Vazquez, Jorge & Xu, Yongsheng, 2008. "The tradeoff between growth and equity in decentralization policy: China's experience," Journal of Development Economics, Elsevier, vol. 86(1), pages 112-128, April.
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    Cited by:

    1. Mr. John D Brondolo & Zhiyong Zhang, 2016. "Tax Administration Reform in China: Achievements, Challenges, and Reform Priorities," IMF Working Papers 2016/068, International Monetary Fund.
    2. Vitor Gaspar & Laura Jaramillo & Mr. Philippe Wingender, 2016. "Political Institutions, State Building, and Tax Capacity: Crossing the Tipping Point," IMF Working Papers 2016/233, International Monetary Fund.

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