Abstract:
This paper focuses on China’s Subnational Government Debt Paradox, analyzes its overborrowing mechanism by using the fiscal decentralization theory. On the basis of expounding the meaning and the form of soft budget constrains,we analyse the SOE debt crisis in the 1990s and the current case of subnational government’s overborrowing,theoretically explain why the debt crisis repeated and describe its procyclicality.
Doi T. and T. Ihori. 2006.“Soft-Budget Constraints and Local Expenditures”,Faculty of Economics,University of Tokyo: CIRJE-F-422.
[9]
Fromaget, X. 2008.“The Soft Budget Constraint Problem in Transition and Developing Countries”,Dissertation,University of Friburgensis.
[10]
Jin, J. and H. Zou. 2003.“Soft Budget Constraint on Local Governments in China”, Fiscal Decentralization and the Challenge of Hard Budget Constraints, 289~322.
[11]
Wildasin, D. E. 2004.“The Institution of Federalism:Toward an Analytical Framework”, National Tax Journal, 57(2): 247~272.
