Constraints on Economic Growth targets, Inter-governmental competition and the Provision of Basic Public Services

XU Huan-ge; JIANG Shuo-liang

Volume 35 Issue 6

Apr. 2021

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Article Navigation > Journal of Guangdong University of Finance & Economics > 2020 > 35(6): 4-16

XU Huan-ge, JIANG Shuo-liang. Constraints on Economic Growth targets, Inter-governmental competition and the Provision of Basic Public Services[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(6): 4-16.

Citation:

XU Huan-ge, JIANG Shuo-liang. Constraints on Economic Growth targets, Inter-governmental competition and the Provision of Basic Public Services[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(6): 4-16.

Citation:

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Constraints on Economic Growth targets, Inter-governmental competition and the Provision of Basic Public Services

School of Public Economics and Ad ministration, Shanghai University of Finance and Economics, Shanghai 200433, China

Received Date: 2020-09-21
Available Online: 2021-04-26
Publish Date: 2020-12-28

Abstract

Abstract

Based on the provincial panel data from 2007-2017, this study aims to examine the impact of economic growth target on the provision of basic public services and the moderating effect of inter-governmental competition from the dual perspectives of the scale and the preference of basic public services expenditure. It is found that under the constraint on economic growth target, local governments will scale up expenditure on basic public services, but will still show a preference for lesser public services, and inter-governmental competition will reinforce this effect. Heterogeneity studies show that under the constraint on economic growth target, the scale of expenditure on basic public services increases in the eastern region of the country, while the economic target setting in the western region has an obvious negative effect on its basic public service expenditure; the economic growth target featured with"soft constraint"is conducive to increasing the scale of expenditure on basic public services and reducing the negative incentive to preferable expenditure on basic public services. The spatial effect study shows that the setting of growth target not only has a negative impact on the spending preferences for basic public services in the region, but also has a significant spatial spillover effect on neighboring regions. For this reason, it is necessary to set compatible economic growth target, motivate local governments to invest in public service projects with long-term benefits, and adopt different assessment strategies for different regions in order to increase China's supply of basic public services in a balanced manner.
- economic growth target,
- basic public services,
- provision of basic public services,
- government competition,
- incentive compatibility,
- local government

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References(26)

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