Insights

At the end of each year, “spending surges” always spark heated discussions. Unused budgets must be cleared, and rushed spending leads to immense waste, a problem usually blamed on the budgetary system. Recently, a paper titled The Enduring Trauma: How Officials’ Childhood Famine Experiences Affect Year-end Spending Surge, co-authored by Professor Zhang Peng from the School of Management and Economics (SME) at The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen), with Professor Zhang Ping, Lecturer Chen Xing, and PhD student Zhuge Andong from Fudan University, reveals a more hidden driver: the long-term shaping effect of individual officials’ early experiences on public fiscal behavior.

Through empirical analysis of Chinese city-level data and official biographies from 2008 to 2018, the study finds that officials who experienced the Great Famine during childhood develop a significant “fiscal conservative” tendency. However, under the constraint of “use it or lose it” budget rules, this conservative preference, rather than saving fiscal funds, causes budget idleness due to suppressed spending on regular days, ultimately triggering more intense Year-End Spending Surges (YESS).

Recently, the study was officially published in the Journal of Development Economics, a top-tier international journal in development economics.

About the Author

Zhang Peng

Associate Professor

SME, CUHK-Shenzhen

Research Field

Environmental Economics, Development Economics, Labor Economics, Health Economics, and Applied Micro-econometrics

Co-authors

Chen Xing

Fudan University

Zhang Ping

Fudan University

Zhuge Andong

Fudan University