TITLE:
Fiscal Decentralization, Corruption and Urban-Rural Income Inequality: Evidence from China
AUTHORS:
Longlong Duan
KEYWORDS:
Fiscal Decentralization, Corruption, Urban-Rural Income Inequality, Threshold Panel Model
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.4,
August
5,
2015
ABSTRACT: This paper follows fiscal federalism that a higher degree of fiscal
decentralization is always associated with lower corruption and income
inequality. There exists a stronger dynamic relationship among fiscal
decentralization, corruption and income inequality in developing countries.
Based on the panel dataset from 1999 to 2012, this research is focusing on
China, showing that it does not exist a simple linear relationship among fiscal
decentralization, corruption and urban-rural income inequality, instead, the
relationship between fiscal decentralization and urban-rural income inequality is
more in line with a specific “U” shape. While the effect of corruption on
urban-rural income inequality, it can be gradually weakened as the reform of
fiscal decentralization which expands the existed researches made by Mah (2013)
and Lessmann (2010).