This paper develops a method for decomposing the contributions of various types of public investment on regional inequality and applies the method to rural China. Public investments are found to have contributed to production growth in both the agricultural and rural non-agricultural sectors, but their contributions to regional inequality have differed by type of investment and the region in which they are made. All types of investment in the least-developed western region reduce regional inequality, whereas additional investments in the coastal and central regions worsen regional inequality. Download full-text discussion paper .
Proper citation is required.