148
Baoyun Qiao and Anwar Shah
T A B L E 4 . 4 Local Responsibilities and Relative Importance, 2003 (percent)
Expenditure responsibilities
Responsibilities shared with the central government Education Capital construction Government administration Expenditures for public security agency, procuratorial agency, and court of justice Social security Expenditures for supporting agricultural production and agriculture administration Innovation and science and technology promotion funds of SOEs Health care Social welfare subsidies Price subsidies Expenditures to support less-developed areas Research and development Geological prospecting Armed police troops National defense Diplomacy and external assistance Debt Purely local responsibilities Urban maintenance and construction Environmental protection and city water supply
Share in local expenditure
Local share in consolidated government expenditure
15.7 11.1 9.6
91.8 55.6 80.5
7.1 6.5
94.6 88.6
5.8
88.1
4.8 4.4 2.9 2.2 0.9 0.6 0.5 0.1 0.1 0.1 0.1
75.4 97.2 99.0 61.5 94.9 36.5 76.1 9.2 1.2 12.7 0.9
4.4 0.5
Source: China, State Statistical Bureau 2004.
some services, such as local public security, to avoid the cost of delivering them through a competitive market. However, the coverage of such experiments is very small, and this option is debated. The other group is financed partly by budgetary funds. These organizations can be paid with lump-sum or matching grants for services such as public utilities or can be compensated for the gap between expenditures and revenues collected from the provision of services such as public schools and public hospitals. The competition from the market for these organizations is limited. In summary, there are wide concurrent assignments of expenditure responsibilities among governments at different levels. The expenditure
