Financing Local Government in the People's Republic of China

by Wong, Christine P. W.

• ISBN13: 9780195900279
• ISBN10: 0195900278
• Format: Hardcover
• Copyright: 1997-06-26
• Publisher: Oxford University Press

Summary

This study focuses on the status of local government finance at the subprovincial level. Fiscal reforms over the past decade have not kept pace with the rapid changes in demand for government services at lower levels. Wong examines the composition of revenue and expenditure at city, country, and township levels, and provides recommendations.

Table of Contents

List of Tables	x	(5)
List of Figures	xv	(1)
List of Text Boxes	xvi	(1)
Preface	xvii	(3)
Acronyms	xx
Summary	1	(26)
Chapter 1 Overview of Issues in Local Public Finance in the PRC	27	(34)
Christine P.W. Wong
The Fiscal Reform of 1994	31	(7)
Provisions	31	(4)
Implementation of the Reform Package	35	(2)
Implications for Local Finance	37	(1)
The Local Administrative Setup	38	(6)
Revenue Sharing at the Subprovincial Levels	44	(4)
Trends in the Vertical Distribution of Revenues and Expenditures	48	(10)
Role of Off-Budget Finance	58	(3)
Chapter 2 The Role of Subnational Governments: Theory and International Practice	61	(22)
Christopher Heady
Assignment of Expenditure Responsibilities	61	(5)
Basic Principles	61	(1)
Different Areas of Service	62	(1)
Services with Both Local and National Components	63	(3)
Tax Assignments	66	(4)
Avoidance of Distortions	66	(2)
Advantages of Fiscal Competition	68	(1)
Allocation of Revenues	69	(1)
Allocation of Tax Administration	70	(1)
Local Public Finance	70	(13)
Local Taxes	71	(2)
Service Charges	73	(1)
Government Grants	74	(4)
Loans	78	(2)
Asset Sales	80	(3)
Chapter 3 Urbanization and Urban Infrastructure Services in the PRC	83	(44)
Kam Wing Chan
Role of Cities in Economic Development	83	(3)
Introduction: General Patterns	83	(1)
Role of Cities in the Economic Development of the PRC	84	(2)
Changing Status of Cities in the Administrative System	86	(9)
Line-Item Cities	86	(4)
Coastal Open Cities	90	(1)
Counties Under Cities	91	(1)
Counties into Cities	92	(1)
Townships into Towns	93	(2)
Era of Rapid Urban Growth and Migration	95	(6)
Trends	95	(4)
Policies Favoring Urbanization	99	(2)
Urban Development and Infrastructure Provision	101	(3)
Urban Planning in a Planned Economy	101	(3)
Changes Since 1978	104	(8)
Housing Development and Reforms	112	(3)
Reform Programs	112	(1)
Current Situation	113	(2)
Urban Infrastructure Services	115	(5)
Level of Provision	115	(5)
Urbanization Issues in the PRC	120	(7)
Local Administrative System	122	(1)
Urban Development Strategy	123	(1)
Urban Infrastructure Services: Demand and Shortfall	123	(2)
Equity Issues	125	(2)
Chapter 4 Municipal Public Finance	127	(40)
Christopher Heady
Theory and Practice of Urbanization Financing	127	(12)
Theory of Urbanization Financing	128	(3)
Experience of Other Countries	131	(3)
Urbanization Financing in the PRC	134	(3)
Road Financing	137	(1)
Water Supply Financing	138	(1)
House Construction Financing	138	(1)
Assessment of Muncipal Budgets in the PRC	139	(19)
Muncipal Budgets in Guizhou Province	139	(1)
Municipal Budgets in Shandong Province	149	(9)
Provision of Urban Services	158	(4)
Public Health	159	(1)
Primary and Secondary Education	160	(2)
Citywide Social Security Schemes	162	(3)
Urban Finance Issues in the PRC	165	(2)
Chapter 5 Rural Public Finance	167	(46)
Christine P. W. Wong
Role of Rural Governments and Expenditure Assignments	169	(6)
County	169	(1)
Township	170	(4)
Village	174	(1)
Status of Budgets in Fieldwork Counties	175	(15)
Composition of Revenues	176	(2)
Revenue Trends	178	(3)
Revenue Sharing with Higher Levels	181	(3)
Earmarked and Other Subsidies	184	(2)
Assessment	186	(4)
Township Finance	190	(8)
Composition of Revenues	191	(1)
Revenue Sharing with Counties	192	(3)
Role and Composition of Subsidies	195	(2)
Assessment	197	(1)
Village Finance	198	(2)
"Off-Budget" Revenues	200	(9)
Composition	200	(3)
Assessment	203	(6)
Issues	209	(4)
Chapter 6 Provision of Public Services in Rural PRC	213	(70)
Loraine A. West
Rural Education Services	214	(32)
Education Goals	214	(2)
Organization	216	(3)
Financing of Rural Education	219	(22)
Implications for the Quality of Education	241	(5)
Rural Public Health Care	246	(25)
Organization	247	(2)
Quality of Health Care	249	(10)
Financing of Rural Public Health Care	259	(12)
Rural Social Welfare Services	271	(9)
Social Insurance Programs	271	(2)
Poverty Alleviation	273	(7)
Natural Disaster Assistance	280	(1)
Issues	280	(3)
Chapter 7 Equalization Issues	283	(30)
Loraine A. West
Christine P. W. Wong
Horizontal Distribution of Fiscal Resources	283	(3)
Redistribution Mechanisms in the Fiscal System	286	(3)
Net Effect of Intergovernmental Transfers	289	(10)
Horizontal Distribution of Off-Budget Revenues	299	(1)
Disparities in Service Provision	300	(10)
Between Provinces	301	(2)
Between Urban Areas	303	(1)
Between Rural Areas	304	(2)
Between Urban and Rural Areas	306	(4)
Issues	310	(3)
Chapter 8 Policy Recommendations	313	(22)
Christine P. W. Wong
Christopher Heady
Lessons from the Experience of Other Countries	316	(1)
Special Issues in the PRC as a Transition Economy	317	(3)
Issues of Urban Public Finance	320	(3)
Rethinking Rural Public Finance	323	(3)
Rethinking Poverty Assistance	326	(2)
Policy Recommendations	328	(7)
Annex	335	(6)
References	341	(14)
Contributors	355	(2)
Subject Index	357