Corruption, Marketization and Political Budget Cycle in China
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| Title | Corruption, Marketization and Political Budget Cycle in China
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| Author | Gao Nan |
| Organization | Research Institute of Economics and Management,Southwestern University of Finance and Economics |
| Email | n.aarongao@gmail.com |
| Key Words | Corruption; Marketization; Promotion Incentives; Political Budget Cycle |
| Abstract | This paper explores whether there’s Political Budget Cycle (PBC) in China, we set up a theoretical model based on local government promotion tournament to explain if PBC will be affected by corruption level and the degree of marketization, we proposed two hypotheses to illustrate how these two factors might affect PBC. Also, this paper uses GMM to test the hypotheses empirically. What we have found is: China do exists PBC, there’s strong evidence to show that local government manipulate fiscal policy during election, fiscal revenue and expenditure are significantly different from that in non-election year. Besides, we also found the result is in favor of our hypotheses, provinces with higher corruption and marketization will have less magnitude of PBC. This paper provides theoretical and empirical support for further research on PBC in China. |
| Serial Number | WP365 |
| Time | 2012-09-18 |
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