تأمین منابع مالی مجدد و تمرکز زدایی: مدارک و شواهد از چین

Decentralization can complement market liberalization by strengthening incentives of agents to respond to market signals. However, in China banks centralized lending authority following financial reforms in the mid-1990s. We present a new theory of financial decentralization in which centralization provides a credible commitment not to refinance bad projects by reducing available information. Using data from Chinese rural financial institutions, we empirically assess the determinants of decentralization and the likelihood of collateral seizure, strongly confirming the predictions of the refinancing model. We conclude that weak institutional environments may limit the efficiency of financial intermediation despite financial market liberalization.

In recent years, financial liberalization has been a main focus of reform in developing countries and more recently in transition economies (e.g., Haggard and Lee, 1995). Financial liberalization transforms a heavily regulated system into a market-oriented one by reducing barriers to entry, reducing government influence over credit allocation, and increasing reliance on market-determined interest rates. Conventional wisdom holds that decentralization of control rights goes hand-in-hand with market liberalization. With greater decision-making authority, local managers may have greater incentives to exploit local information in response to market signals, which increases the efficiency of resource allocation. Effective use of local information may be especially important when there are large information asymmetries between central and local managers. In banking, this is likely to occur in weak institutional environments in which credit ratings, high quality appraisal and auditing services, standardized reporting systems, and well-developed legal systems are absent. Surprisingly, in China most banks responded to financial reforms in the mid-1990s by centralizing rather than decentralizing control rights. The reforms intended to further the commercialization of state-owned banks and improve the responsiveness of lending to economic fundamentals, but they did not liberalize interest rates.1 This contrasts with the history of key reforms in China's agricultural and industrial sectors that decentralized decision-making authority to households and firm managers and liberalized prices (Naughton, 1995), but it is consistent with evidence from developing and transition economies that financial liberalization and decentralization may have unintended effects if underlying institutional factors are left unaddressed (Cho, 1986, Buch, 1996, Koford and Tschoegl, 1999 and Schmidt, 1998).2

China's financial reforms have aimed to promote greater independence and market orientation of financial intermediaries through increased bank competition, reduction of policy loans, and stronger profit incentives. Decentralization of managerial authority in such settings should help to improve the efficiency of resource allocation by giving local managers greater incentives to screen loans effectively and enforce repayment. This is especially true when institutions capable of providing independently verifiable information on credit-worthiness and collateral values are lacking, which increases information asymmetry between the center and local levels and makes local information more valuable. In China, however, banks responded to reform by centralizing rather than decentralizing lending authority. In this paper, we provide a new explanation for the benefits of centralization in China as well as in other developing and transition economies. When banks have difficulty committing credibly not to refinance projects if firms are in distress, centralization can help by reducing available information. We present a costly information model of decentralization, including several simple extensions, as well as a refinancing model, that extends the first model to capture dynamic incentive problems, to illustrate potential explanations for decentralization in China and make precise theoretical predictions about how key features of the banking and economic environment should affect the decentralization of financial institutions. For example, the refinancing model predicts that greater decentralization should be associated with lower cost of funds, better firm quality, and lower collateral values, while other explanations yield opposite or inconclusive predictions. Then, using unique data from surveys conducted by the authors of rural financial institutions in China, we take the theory to the data. This exercise provides strong empirical support for the refinancing model. The more frequently conjectured reason for centralization, agency or corruption problems, is not well supported by the data or by the trends of decreasing policy influence and increasing centralization over time, nor can it explain why such problems cannot be solved by directly addressing the incentive problem, which avoids the costly loss of local information.