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.