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| Abolition of Agricultural Taxation, Agricultural Development and Local Government Behaviors: Evidence from County Data |
| WANG Fang, CHEN Shuo, WANG Jin
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School of Public Administration, East China Normal University;
School of Economics, Fudan University;
Division of Social Science, Hong Kong University of Science and Technology |
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Abstract This paper assesses the impacts of agricultural tax abolition reform on agricultural productivity, rural incomes and local public finance in China using data covering 1997 Chinese counties and the period from 1999 to 2009 spanning the abolition of agricultural taxation in 2003-05. The abolition was shown to have increased agricultural productivity and rural incomes, but led county governments to reallocate land from the agricultural sector to industrial and commercial uses, which gives them extra-budgetary revenue to compensate for the budgetary loss. These findings illustrate the importance of general equilibrium framework in policy evaluation.
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Received: 22 March 2017
Published: 01 November 2018
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