The efficiency of provincial governments in China from 2001 to 2010: measurement and analysis

Date01 May 2014
Published date01 May 2014
DOIhttp://doi.org/10.1002/pa.1518
Special Issue Paper
The efciency of provincial governments
in China from 2001 to 2010: measurement
and analysis
Renwu Tang
1
*, Tianwei Tang
2
and Zong Lee
2
1
School of Government, Beijing Normal University, Beijing, China
2
School of Finance, Jiangxi Normal University, Jiangxi, China
Measurement and analysis of local government efciency is important; however, it is also difcult. Tomeasure government
efciency,this paper employs the relative measurement method described in the research literature. It develops and applies
an index to measure and rank the government efciency of 31 provincial governments in China (including autonomous
regions and municipalities) from 2001 to 2010. This permits a comparative analysis of provincial government efciency
and of the factors that inuence it, among Chinas eastern, central, and western regions. The ndings suggest a high
association between the degree of economic development and local government efciency, and in this respect, a large
disparity has been observed between central and western regions on the one hand and the eastern region on the other.
It is argued that provincial governments in the central and western regions should focus on improving residentswelfare,
the quality of regional economic growth, and the level of social development by constantly enhancing government
efciency, optimizing the supply of public services, controlling the size of government, and thus improving residents
disposable income. Copyright © 2014 John Wiley & Sons, Ltd.
INTRODUCTION
Local government efciency refers to the compari-
son between nancial investment and its effects on
local government at all levels (including the Public
Security Bureau, the prosecutorsofce, and the
court), and namely the comparison between
government costs and government benets. It
reects the relation between the process and the
results of government performance. In a market
economy, by offering public services and managing
public affairs, the government, as a resource
allocation mechanism, eliminates or reduces market
failure, addresses external effects, and improves
the efciency of resource allocation to promote
social justice and sustainable development. Highly
efcient governments are able to provide comprehen-
sive legal systems, appropriate decision making, excel-
lent services, sound management, and advanced
education for the development of enterprises and the
economy (Tianwei, 2009a, 2009b). Therefore, govern-
ment efciency as an important factor in national
strength is in line with corporate efciency and na-
tional rejuvenation (IMD, 2002). To improve Chinese
government efciency, it is urgent to have a compre-
hensive understanding of the characteristics of govern-
ment efciency through measurement and analysis.
However, it is difcult to measure and analyze
the efciency of local governments. On the one
hand, the non-marketability of government
activities makes it difcult to carry out cost-benet
analyses directly. On the other hand, their monop-
oly and authority lead governments to violate
government policies and regulations, breed corrup-
tion, and generate rent seeking.
Based on relevant quantitative research publica-
tions on local government efciency, this paper
*Correspondence to: Renwu Tang, School of Government
Management, Beijing Normal University, PO Box 100875, No. 19,
XinjiekouwaiStreet, Haidian District, Beijing,China.
E-mail: rwtang@bnu.edu.cn
The copyright line for this article was changed on 19 May 2016 after original online publication.
Copyright © 2014 John Wiley & Sons, Ltd.
Journal of Public Affairs
Volume 14 Number 2 pp 142153 (2014)
Published online 15 April 2014 in Wiley Online Library
(www.wileyonlinelibrary.com) DOI: 10.1002/pa.1518

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