4.4 Local Responsibilities and Relative Importance,2003

148 Baoyun Qiao and Anwar Shah

TABLE 4.4 Local Responsibilities and Relative Importance, 2003 (percent)

Local share in consolidated Share in local government Expenditure responsibilities expenditure expenditure

Responsibilities shared with the central government Education 15.7 91.8 Capital construction 11.1 55.6 Government administration 9.6 80.5 Expenditures for public security agency, procuratorial agency, and court ofjustice 7.1 94.6 Social security 6.5 88.6 Expenditures for supporting agricultural production and agriculture administration 5.8 88.1 Innovation and science and technology promotion funds ofSOEs 4.8 75.4 Health care 4.4 97.2 Social welfare subsidies 2.9 99.0 Price subsidies 2.2 61.5 Expenditures to support less-developed areas 0.9 94.9 Research and development 0.6 36.5 Geological prospecting 0.5 76.1 Armed police troops 0.1 9.2 National defense 0.1 1.2 Diplomacy and external assistance 0.1 12.7 Debt 0.1 0.9

Purely local responsibilities Urban maintenance and construction 4.4 Environmental protection and city water supply 0.5

Source: China, State Statistical Bureau 2004.

some services,such as local public security,to avoid the cost ofdelivering them through a competitive market.However,the coverage ofsuch 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 ofservices such as public schools and public hospitals.The competition from the market for these organizations is limited.

In summary,there are wide concurrent assignments ofexpenditure responsibilities among governments at different levels.The expenditure