The Study On The Income Gap Focused On The Chinese-style Decentralization

The most important feature of the Chinese-style separation of powers is in thethe economic decentralization with the large political structure unchanged. This articlewill explore the patterns of behavior of local governments in China under thedecentralized institutional arrangements, which led to the widening income gap. Overthe past30years, Chinese social income gap continued to widen, the performance ofthe region and the expansion of the income gap between urban and rural areas, thewidening income gap between the industry, the inequality widening income gapbetween different groups of people and public services. This article will present afiscal decentralization and promotion tournament mode to explain the behavior oflocal governments which affect the income gap. And we will take GuangdongProvince as an example to make the theoretical model derivation and empirical, whichtest China decentralization impact. The results showed that: fiscal decentralization isconducive to promote the convergence of the income gap between urban and ruralareas, but the economic performance evaluation system embedded in the promotiontournament mode distorts the incentives and behavior patterns of local officials, whichled to the expansion of urban-rural income gap.