Economic performance of the pairing-off poverty alleviation between China’ cities

Abstract

This study evaluates the economic performance of China's East-West pairing-off poverty alleviation, a policy enacted in 2016 aiming to eradicate absolute poverty by 2020 through substantial fiscal transfers from the assisting cities to the assisted impoverished counties. Employing a counterfactual framework and analyzing data from 2013 to 2018, this research assesses the economic performance of China's East-West pairing-off poverty alleviation. Our findings reveal a negative impact of the fiscal pressure burdened by the assisting cities on their economic performance. Meanwhile, the allocation of anti-poverty funds to the assisted counties does not exhibit a significant impact on their economic outcomes. The mechanism analysis suggests that the fiscal pressure experienced by the assisting cities shows negative impacts on fixed assets investment, innovation activities, and economic growth expectations. Further analysis indicates a negative relationship between the policy and the growth of secondary industry and rural income in the eastern regions, while simultaneously identifying a positive impact on the enterprises' financial burden. These results underscore the complex economic trade-offs inherent in poverty alleviation strategy transferring fiscal funds from developed regions to less developed regions and call for a global understanding of pure cash transfer programmes' impacts.