Fiscal Incentives and Political Budget Cycles in China
2014/01/14
研討會日期 : 2014-01-14
時間 : 14:30
主講人 : Ms. Pi-Han Tsai
地點 : Conference Room C103
演講者簡介 : Ms. Tsai received her Master Degree in Economics from University of California, Irvine in 2011. She expects to receive her Ph.D. degree in Economics at the University of California, Irvine in 2014. Her research fields are public economics, political economy, applied microeconomics, and experimental economics.
演講摘要 : Political budget cycles in democracies have been extensively analyzed, but few studies of non-democracies exist. This paper explores political budget cycles in China’s provinces. The structural component of political decision making in China is actually similar to its democratic counterparts, even with an absence of general democratic elections, reflecting the motivation of politicians to stay in office or be promoted. A simple theoretical model suggests that, in order to increase the odds of being promoted, politicians have an incentive to treat current expenditures and capital expenditures differently. Using data from Chinese provinces from 1980 to 2006, the analysis finds that two years prior to the National Congress of the Communist Party (NCCP), politicians are likely to shift public spending toward capital expenditures, such as innovation funds and capital construction, and away from current expenditures, such as agricultural subsidies, social expenditures and government administration. The opposite pattern occurs during the year of the NCCP, when politicians increase current expenditures and decrease capital expenditures. The increased capital expenditures two years prior to the NCCP is accompanied by an increase in taxation and total aggregate spending. However, the effects of a provincial leader’s tenure on political budget cycles are minimal, implying a weak causal relationship between spending composition and a politician’s time in office at the provincial level.
