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Paper by Dr. Guoqiang Lou Published in Economic Research Journal

2011-04-15Set

Lately, IAR Assistant Research Fellow Dr. Guoqiang Lou has had a paper published in the best Chinese economics journal—Economic Research Journal (2010-12). The paper is titled "When Can Competitions Reinforce the Discipline of Governments?"

It is argued in his paper that the role of competition in disciplining government is conditional. When regional governments compete in tax and public service simultaneously, the relationship between the multiple competitions depends on the endowment of the economy. Even in symmetric competitions, when capital endowment is plentiful, the tax competition can increase the incentive of government to supply more public goods. However, when the endowment is scare, more intensive tax competition may induce more public resource into extravagant official consumption. Using the provincial level panel data in China, the empirical evidences support the above proposition.