A Catalyst for the Improvement of Inclusive Public Service: The Role of High-Speed Rail

Basic public service (BPS) serves as a crucial connection between governments and citizens, impacting the standard of living and well-being of the populace. Can High-Speed Rail (HSR) service incentivize local governments to improve the fiscal competition model of prioritizing production over public service to expand the supply of public services? This study empirically examines the impact of HSR service on the provision of BPS based on panel data from 282 cities in China during the period from 2008 to 2020. The findings indicate that improvements in HSR service significantly stimulate the provision of BPS, a result that withstands various robustness tests. An analysis of mechanisms reveals that HSR service enhances the provision of BPS by mitigating tax competition and fostering fiscal expenditure competition among local governments. Furthermore, this study demonstrates that the positive impact of HSR is more pronounced in cities characterized by high levels of fiscal decentralization and financial autonomy. In western regions and peripheral cities, HSR service has a more pronounced effect on BPS provision. Ultimately, this study offers valuable policy insights for governments to optimize fiscal expenditure structures and bolster social governance capabilities.