Neighborhood Competition, Fiscal Decentralization and Fiscal Expenditure Input Bias Policy
LIU Xiao-yong1,2
1.Industrial and Urban Development Research Center, South China University of Technology, Guangzhou 510006, China; 2.School of Economics and Trade, South China University of Technology, Guangzhou 510006, China
Abstract：
The paper constructs geographic and economic spatial weight and uses spatial panel model to investigate the effects of fiscal decentralization and neighborhood competition on expenditure structure during 1985 to 2006. The total effects is decomposed into direct and indirect effects. We find Provincial decentralization has non-significant effects on capital expenditure but significant negative effects on social development expenditure. The improvement of neighbor provincial GDP growth rate will increase the ratio of capital expenditure to total expenditure but decrease the ratio of social development expenditure to total expenditure significantly. There exists yardstick competition among local governments.
2016 
