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Does National Auditing Improve Local Fiscal Transparency? Evidence From China

Year: 2025

Type: article

Abstract: ABSTRACT This paper examines whether and how national audits affect local fiscal transparency in China. Using panel data from 30 provinces between 2009 and 2018, we find that national audits significantly improve local fiscal transparency after controlling for various economic and institutional factors. The effect of national audits on fiscal transparency varies significantly by region, which is stronger and statistically significant in eastern regions and in regions with high land finance, while not significant in central‐western regions or in those with low land finance. Furthermore, the positive impact is primarily driven by the disclosure and defense functions. These findings suggest that national audits are valuable for improving fiscal transparency, but their effectiveness varies depending on regional economic development and local government financing mechanisms.

Source: International Studies of Economics

DOI: 10.1002/ise3.70007

Authors: Zhuo Chen, Mingzhi Hu

Institutions: Nanjing Audit University, Zhejiang University of Technology

Language: English

Topic: Local Government Finance and Decentralization

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: gold

Estimated APC paid: $2,600