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The 2008-2009 global financial crisis has made budget management and fiscal responsibility more imperative in many developed economies. A budget crisis has not occurred in emerging economies such as China. However, in China, the demands of fiscal responsibility have increased against the backdrop of bulging government revenues in recent years. Over the past decade, the Chinese government has started to promote self-constrained bureaucracy and strengthen its fiscal responsibility and accountability in budget formulation and implementation. The 1999 budget reform that aimed to improve fiscal responsibility was hailed a success by previous literature. Drawing on field research in five counties in China between 2008 and 2010, it is argued that though some achievements have been made, the budget reform has not substantially improved both accountability and transparency within the bureaucracy. The implication of this study is that top-down, supply-side reforms led by the state may not be effective. (China/GIGA)

As agents of the state, civil servants play a central role in public governance and socioeconomic development. In developing countries, an effective civil service pay system may provide strong incentives for better public service and rein in corruption, whereas poor remuneration can fuel corruption and discontent among civil servants. Grappling to develop a well-functioning pay regime has challenged the PRC since its birth. Over the past decade, reforms implemented in the civil service pay system have been closely associated with legitimacy change (from an economy-based approach to welfare-based one), income distribution and central-local relations. However, these reforms have sparked a heated debate over their legitimacy, effectiveness and direction. By examining the complexities of this situation and the tug-of-war over remuneration among different players, this pioneering study deepens our understanding of the internal tensions with which China's reform process is fraught.

Decentralized governance is often viewed as an effective way to improve public services and government accountability. Many also document the negative dimensions of fiscal decentralization, especially in transition economies; thus, the combination of decentralization and centralized control has gained currency in some countries in recent years. Based on first-hand data and other documentary sources, and using civil service remuneration as an example, this paper attempts to explore how decentralized governance works in China and what hinders decentralization from performing better. The findings show that Chinese centralized control over expenditure in public sector remuneration primarily serves to enhance ministry control. Local bureaucrats, meanwhile, exploit better remuneration to boost their personal interests. This paper argues that political commitment rather than central transfer is greatly needed for utilizing the benefits of decentralized governance. (J Contemp China/GIGA)