Urban-biased policy, government intervention and urban-rural income gap: evidence from provincial government work reports in China

PurposeThis paper aims to test the causal relationship between urban-biased policy and urban-rural income gap and further examine the moderating role of government intervention.Design/methodology/approachBased on the provincial Government Work Reports and the long-term policy practice of implementin...

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Bibliographic Details
Published in:Kybernetes 2024-11, Vol.53 (11), p.4929-4947
Main Authors: Nie, Changfei, Wang, Haohui, Feng, Yuan
Format: Article
Language:English
Subjects:
Agricultural production
Developing countries
Economic development
Economic growth
Housing prices
Income
Income inequality
Industrial development
LDCs
Market prices
Public services
Rural areas
Rural development
Subnational government
Urbanization
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Summary:PurposeThis paper aims to test the causal relationship between urban-biased policy and urban-rural income gap and further examine the moderating role of government intervention.Design/methodology/approachBased on the provincial Government Work Reports and the long-term policy practice of implementing the target responsibility system, the authors construct a unique indicator of urban-biased policy in China. Further, applying the panel data of 30 Chinese provinces in 2003–2018, the authors explore the causal relationship between urban-biased policy and urban-rural income gap.FindingsThe results show that urban-biased policy has contributed to the widen urban-rural income gap in China, which supports Lipton's urban-biased hypothesis. Further research shows that the stronger the government intervention, the bigger the role of urban-biased policy in widening urban-rural income gap.Originality/valueOn the one hand, this study not only investigates the direct effect of urban-biased policy on urban-rural income gap, but also examines the moderating effect from the perspective of government intervention, which helps to enrich the relevant studies of urban-biased theory. On the other hand, the authors' findings provide the latest empirical evidence for urban-biased policy to widen urban-rural income gap and presents a reference and warning for China and other developing countries about balancing the relationship between equity and efficiency during economic development.
ISSN:0368-492X
1758-7883
DOI:10.1108/K-01-2023-0084