Decentralizing China: analysis of central strategies in China's fiscal reforms

Abstract

China's post-Mao reforms have devolved significant economic and fiscal power from central to local governments. However, decentralization from above involves political risks: weakened central control and increased local discretion may allow local governments to engage in self-interested activities with negative externalities to other regions and even the whole nation. A crucial question thus arises: how can the national government enjoy the benefits of decentralization while at the same time keeping the undesirable local behaviors in check? Through analysis of China's fiscal reforms, this paper suggests that the institutional advantageous position of the central government and its shrewd bargaining strategies played an important role in helping the central government maintain control over the fiscal system, inducing mutually acceptable outcomes for both the center and localities.

Notes

^*Jing Vivian Zhan is an assistant professor in the Department of Government and Public Administration, the Chinese University of Hong Kong. She received her Ph.D. from the Department of Political Science at UCLA and specializes in comparative politics and methodology. Her current research interest focuses on the political economy of China's post-Mao reforms, post-Communist transitions, and development

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Additional information

Notes on contributors

Jing Vivian Zhan

69 *Jing Vivian Zhan is an assistant professor in the Department of Government and Public Administration, the Chinese University of Hong Kong. She received her Ph.D. from the Department of Political Science at UCLA and specializes in comparative politics and methodology. Her current research interest focuses on the political economy of China's post-Mao reforms, post-Communist transitions, and development