Guns–butter tradeoff in contemporary China |
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| Authors: | Yu Wang |
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| Institution: | Department of Government and Public Administration, Chinese University of Hong Kong, 3rd Floor TC Cheng Building, Shatin, Hong Kong, People's Republic of China |
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| Abstract: | This study offers an investigation of the relationship between defense and social spending in the People's Republic of China. In particular, three consecutive questions are answered here. Does a warfare–welfare tradeoff exist in China's budgetary allocation? Is it positive or negative? What is the causal direction involved? By applying a vector autoregression analysis for the period of 1952–2006, this study finds a unidirectional crowd-out effect going from defense to social spending. |
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| Keywords: | China defense social spending tradeoff VAR |
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