| Summary/Abstract |
In today’s China, over 230 million urban migrants are denied a number of government-funded social benefits which are the basic entitlements of local hukou residents. A conventional justification for this denial is a fiscal burden, since city governments have to shoulder much of the fiscal costs of migration. This article probes whether such denial can be understood by the fiscal capacity of city governments. To develop the understanding, the article estimates expenditure need, calculated as a measure of the cost of providing basic public services for an urban hukou for a sample of 45 cities. It also examines whether local fiscal capacity, based on the comparison of expenditure need with available resources in the given city, can provide equitable and sustainable public services to large and growing migrant populations. The authors find that, although expenditure need per hukou varies considerably between cities, available budgetary resources are not commensurate with expenditure responsibilities in almost all cities. Hukou liberalization requires the central government to play a decisive role in equalizing fiscal capacities between cities.
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