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Fiscal Decentralization and Economic Growth: A Comparative Study of China and India (2005)

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Abstract

Although there are obvious differences in the political systems of China and India, there are surprising similarities in their respective approaches to decentralization. Both countries face similar design issues with their intergovernmental systems, such as the lack of clear expenditure assignments, high transfer dependency, low revenue autonomy, and soft budget constraints. As a result, in both countries there is a lack of aggregate fiscal discipline among sub-national governments, and the quality of sub-national government service delivery is poor. Poor service delivery and the lack of fiscal discipline threaten the ability of both countries to sustain high rates of economic growth.

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  • Jorge Martinez-Vazquez & Mark Rider, 2005. "Fiscal Decentralization and Economic Growth: A Comparative Study of China and India (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0519, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper0519
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    Cited by:

    1. Sharma, Chanchal Kumar, 2014. "Governance,Governmentality and Governability: Constraints and Possibilities of Decentralization in South Asia," MPRA Paper 61349, University Library of Munich, Germany, revised 15 Jan 2015.
    2. Singh, Nirvikar, 2007. "Fiscal Decentralization in China and India: Competitive, Cooperative or Market Preserving Federalism?," Santa Cruz Department of Economics, Working Paper Series qt76d8b4hm, Department of Economics, UC Santa Cruz.
    3. Lan Nguyen & Sajid Anwar, 2011. "Fiscal decentralisation and economic growth in Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 16(1), pages 3-14.
    4. K. L. Devkota, 2014. "Impact of Fiscal Decentralization on Economic Growth in the Districts of Nepal," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1420, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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    Keywords

    China; India; Fiscal Decentralization; Economic Growth; Intergovernmental fiscal;
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