Transfer Payments and Disappearing Soft Budget Constraints:Evidence from the Great Flood of 1998
Quantitative analysis of the central-local fiscal relationship is important for understanding the characteristics of China's intergovernmental behavior.Do transfers,which are key components of the central-local fiscal relationship,play a role in stabilizing local fiscal operations?This paper utilizes the historical event of the 1998 torrential flood to observe the response of county-level governments to the increase in transfer payments from higher levels.It is found that county-level governments in the flood-affected areas received a substantial increase in the centralized special subsidies compared to those in the non-affected areas.After receiving the subsidies,local governments carried out limited fiscal expansion,and the increase in expenditure was mainly used for flood relief.In addition,this paper finds that local governments paid more attention to investing in relief and compassionate care,while the central government took more responsibility for post-disaster recovery and reconstruction;the central government's special subsidies flowed more to the county-level districts under the affected cities.The conclusion suggests that in the emergency management,adequate and timely central transfer payments make a safeguarding and supporting contribution to local governments in disaster relief.
special subsidiestransfer paymentssoft budget constraintsemergency management
万方数据
维普
