Effects of decentralization on local economic growth in China

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Analysis shows that administrative decentralization promotes economic growth, suggesting fiscal measures enhance efficiency.

Administrative decentralization enhances economic growth by decreasing business costs and increasing firm profitability.
Fiscal decentralization encourages local governments to increase firm debt and tax burdens, lacking independent growth benefits.
Both forms of decentralization work together to support industrial upgrading and improve regional resource allocation.
Effective decentralization strategies require simultaneous delegation of both fiscal and administrative powers at local government levels.

Haizhen Jin (2025) studied this question.

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