Fiscal Decentralization and Economic Growth(1999～2008):A Discussion on Fiscal Management

Most papers about the China fiscal decentralization and local economic growth literature are focused on discussing the revenue or expenditure percentage of local to central government in the per capita level.This article gives a new angle of decentralization based on the fiscal management right.It chooses the ratio of expenditure to revenue as a index of the fiscal decentralization,and learns the relationship between decentralization and local economic growth.It is obtained that there is a significant negative correlation between them,by examining the provincial panel data from 1999 to 2008.Meanwhile,It's learned that there is beneficial effect of the fiscal decentralization to growth,controlling the level of local economic development.This potentially suggests China local economic is still in the low development level,which decides the concentrating of public resources in local governments that does not be helpful for the growth,considering the scarcity.