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1、BetweenSeparateStovesandaSingleMenu:FiscalDecentralizationinChina*Kai-yuenTsuiandYouqiangWangABSTRACTArecentbodyofliteraturewiththeparadigmofmarketpreservingfederalismatitscorecontendsthatChinaisadefactofederaliststate.Withtheautonomyandtaxrightsoflocalgovernmentsentrenchedinthe
2、reformera,localgovernmentshaveallegedlybecomedecentralizedenginesofgrowth.Scrutinizingtheunderlyingpremisesoftheaboveparadigm,thisarticlearrivesatapictureofChinaslocalgovernmentsaslessautonomousandthesystemofverticalbureaucraticcontrolasmorepotentthanthatpaintedbytheaboveparadig
3、m.Emergingfromour?ndingsisanalternativeinterpretationofChinascentrallocal?scalrelationsthatmayhelpusunderstandsuchrecentphenomenaastheproliferationofarbitrarycharges.IftheRussiangreatleaptomarketanddemocracyhassofarturnedouttobealitanyofunful?lledaspirationsandgrossmiscalculatio
4、ns,Chinassomewhattimidexcursionintotheunchartedwatersofreformhasbeenamplyrewardedwithunprecedentedgrowth.Tryingtomakesenseofsuchagreatdivergenceisabodyofliteraturethataccentuatestheroleof?scaldecentralizationthedevolutionofdecision-makingpowerstolocalgovernmentsasthehandmaidenof
5、Chinasrapideconomic1growthinthereformera.Throughoutthisarticle,such?scaldecentral-izationisreferredtoasthehelping-handparadigm.Formingthebackbonetothisnewliteratureisthemodelofmarketpreservingfederalism,weavingtogetheratapestryofChineseinstitutionalinnova-tionsthatlimitcentral-s
6、tatepredationandunleashlocal-stateen-trepreneurship.Speci?cally,the?scalcontractingsystemintroducedinthe1980s,thehallmarkofChinasfenzaochifan,ormealspreparedbyseparatestoves,allegedlycommitsthecentreandtheprovincestolong-termandstableschemesofsharingthe?scalpie,clarifyingtheirta
7、xrightsandtherebyrestrainingcentral-statepredation.Beingresidual*TheworkdescribedinthispaperwasfullysupportedbyagrantfromtheResearchGrantCounciloftheHongKongSpecialAdministrativeRegion(ProjectNo.CUHK4119/99H).WethankChristineWongandThomasRawskifortheirvaluableandincisivecomments
8、.1.SeeGabriellaMontinola,YingyiQianandBarryR.We