Macroeconomic Management and Fiscal Decentralization

This publication consists of a set of papers prepared for a Senior Policy Seminar on " Intergovernmental Fiscal Relations in China " , held in Dalian China in September 1994. Thirty participants from China attended the seminar, including senior representatives from several provincial administrations. They were joined by senior officials from the International Monetary Fund (IMF), the World Bank, and by distinguished experts from India, the United States, Germany, and Canada. Comprehensive tax reforms were undertaken in China in January 1994 with a view to broadening the tax base and simplifying the system of tax sharing between central and provincial administrations. The seminar was designed to alert participants from all levels of the Chinese government to the major elements in a strategy for effective intergovernmental fiscal arrangements and to help build consensus for change. This book, which is intended to be of use to policymakers and practitioners, reviews the fundamental principles underlying a system of good intergovernmental fiscal relations; examines the development of the Chinese system of fiscal relations up to and including the reforms of January 1994; evaluates intergovernmental fiscal arrangements in a range of countries (both developed and developing countries) with the purpose of drawing lessons for China; and presents views of Chinese and foreign experts on China ' s fiscal relations problems. The book ' s primary focus is on center-state relationships and only briefly addresses state-local relationships.