Debt authority and intentional overstatement of budgetary deficit: evidence from Chinese Provinces

Zhiyong An, Yilin Hou

Research output: Contribution to journalArticle

Abstract

This paper takes advantage of China’s 2011 “debt decentralization” reform to identify its causal impact on the budgetary deficit of Chinese subnational governments (SNGs) by employing a difference-in-differences approach. We use data on Chinese SNGs from 2009 to 2014 to implement the analysis. We find that debt decentralization can help contain the intentional overstatement of budgetary deficit by SNGs. We argue that our finding carries wider policy implications even beyond China.

Original languageEnglish (US)
Pages (from-to)461-477
Number of pages17
JournalInternational Tax and Public Finance
Volume27
Issue number2
DOIs
StatePublished - Apr 1 2020

Keywords

  • Budgeting
  • Debt
  • Deficits
  • Fiscal decentralization
  • Intergovernmental relation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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