ABSTRACT

In centrally planned economies , or those which are variants of the Soviet­ style command economy, the budgetary relationship between central and local government is clearly a crucial determinant of regional develop­ ment . It has always been an important mechanism whereby the national government controls the regional distribution of wealth, as well as of production, and is becoming increasingly vital with the introduction of market reforms . By 1976 that budgetary relationship in the PRC - particularly as between the centre and the provinces - had become untenable. Central and provincial governments felt both that too much was expected of them, and that they could not (for various reasons) actually meet those expectations .