Researcher receives grant to assess Chinese government fiscal transparency

December 2, 2011 | Research, UToday
By Josh Martin

While many nations’ citizens are concerned about whether their governments are spending public money wisely, some citizenries don’t even know how their governments budget. One faculty member at The University of Toledo is working to change this for one country with the help of a $269,000 grant from the Ford Foundation.


Dr. Gene Chang, director of UT’s Asian Studies Institute and professor of economics, is spearheading a project that will last for at least the next five years and is designed to improve the fiscal transparency practiced by provincial governments across China.

“Corruption is a big problem in developing countries, especially those with authoritarian regimes such as China, but fiscal transparency is a necessary precondition to stopping corrupt practices,” Chang said.

“Even though the resistance to fiscal transparency exists, these countries also want economic growth, and there is growing consensus there that corruption hurts these chances,” he added. “In light of this and growing discontent among Chinese citizens with corruption, even the Chinese Premier Wen Jiabao is calling for financial transparency on the provincial level.”

Chang, along with researchers from several Chinese and American universities, will conduct a survey of the 31 provincial governments across China each year for at least the next five years to determine the transparency of a series of financial information indices for each province. Equipped with this data, the team will assess and rank each provincial government’s transparency in a published report.

Fiscal transparency on the national level has improved over the years, particularly as China joined the World Bank and World Trade Organization (WTO) and disclosed national fiscal data to do so, Chang said. The provincial level data have remained inaccessible, though, and will require the team to search the Internet, write requests, and conduct on-site visits to provincial agencies to obtain the information.

The hope, Chang said, is to publicize the report ranking the level of fiscal transparency of each provincial government in China. As a result, Chinese news organizations, as well as interested scholars and international organizations such as the World Bank, United Nations, International Monetary Fund and WTO, may compel the provincial governments with low transparency rankings to work to improve their scores in the subsequent annual rankings.

“We are very excited for this project,” Chang said. “It is interdisciplinary and collaborative, involving public administration, economics, political science and accounting disciplines, as well as scholars from the U.S. and China. We are pretty confident that when we send questionnaires to provincial governments, we will receive some requested information as the provincial government won’t like to be ranked low in a publicized survey.”

Chang said China was chosen as the object of research for a number of reasons, including the current and growing size of its economy, the significant role it plays in the global economy, the influence it exerts over developing nations in the world that trade with it, and the considerable lack of analysis of provincial-level fiscal transparency there. Another reason is that China is one of the few remaining communist countries in the world, and there are opportunities present to prod the nation to embrace political reform and democratic liberalization, he said.

Chang also noted the significance of this research to the United States in particular, given the complaints of U.S. government officials about China’s undervalued currency and this country’s trade imbalance with China.

The Ford Foundation will provide $268,943 in the coming two-year period, with a potential of further funding.

“The $269,000 grant funding for our research is one of the largest that the University has received in the College of Languages, Literature and Social Sciences for more than a few years,” Chang said. “The Ford Foundation grant committee is very selective, and the competition for these awards is fierce, so we are excited.”

Chang said the Ford Foundation grant is one among a few others that the Asian Studies Institute has received recently for the “excellent research these faculty members do along interdisciplinary lines — providing a leading role.”

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