The ability of local governments to raise revenues has been dramatically altered over the last several decades in rural China, and this has had a significant influence on local governance. The fiscal reforms in 1994 and after 2002 significantly strengthened central government capacity to collect revenues at the provincial, county and township levels. The centralization of tax policies has also fundamentally changed the relationship between central and local administrative levels. This paper examines the cost and benefits of strengthening central government capacity and the increasing reach of the state in rural China. Read full article here.