Association for Public Policy Analysis & Management

As the global urbanization process in developing countries, more and more people live in cities without sufficient infrastructures. Cities have critical role to solve this shortage problem because local governments response to residents’ need directly. Chinese local governments invest heavily on urban infrastructure, which is an exception in developing countries. Although it is generally believed that demand for public service and governmental capability will influence the governmental investment in public service, it is an unknown relationship between these influential factors and public expense of urban infrastructures under Chinese context.

In this research, multivariable regression technique is adopted to study the correlation between urban infrastructure investment and the potential influential factors, such as demand for urban infrastructure service and governmental capability. Urban infrastructure system in this research includes the fixed network infrastructures except for electricity grid, because local government has less control on energy sectors in China. Demand on urban infrastructure service is measured by population and household income. Cities’ GDP and governmental size is used to indicate the governmental capability. The data of urban infrastructure capital formation from over 200 cities come from China Urban Construction Statistical Yearbook.  Social and economic data are collected from Chinese City Statistical Yearbook. The results are expected to identify key factors influencing governmental investment in urban infrastructure in China, which provides empirical evidence on the topics related to governmental investment behavior.