An Study On The Autonomy Of Income And Expenditure System Of Country Government

The county governments play an important role in the governance of Chinesepublic affairs. The county empowering and strengthening Reform that has been carriedout in recent years improves the financial capabilities of county governance, such as thescale of the county revenue and outlay are larger than before. China conducted greatreform on taxation division. The central government has established a money transfersystem through dividing taxation type, differentiating rights, and partaking authorities.It reorganized and identified financial system on both central and local governments.The reform on taxation division objectively reduced the financing ability of countygovernments. The behavior scale and management rights have been enhanced with thedevelopment of national transfer ability. However, county governments are also limitedby certain factors due during social transformation process. In the period, financialsystem is incomplete and governmental relationships have not been properly deal with.On the purpose to pursue max profits, county governments play dual roles during theprocess of financial income and expenditure. Limitation is linked with encourage whileregulation is combined with irregulation. County governments conduct proper strategyin accordance with autonomy and centralization and thus evaluates specific behaviorallogistic. They also make efforts to gain more financial autonomy after havingindependent position.Fiscal decentralization makes the county fiscal autonomy possible. Based on the assumption of “rational man”, this paper asserts that the country-level government hasits special preferences, which push the country-level government to seek larger fiscalresources and get greater autonomy in its fiscal governance. As a qualitative research,this paper analyzes the strategies the country-level government takes in its revenueorganizing and the constraints in its spending. This dissertation analyzes strategychoosing and behavioral flexibility on the background of existing transparent systemand regulation on county level. It is based on financial income and expenditure focusingon autonomy research as key point. It demonstrates the factors that limit or encourageincome and expenditure on county level. It analyzes the deep reasons by SAFframework-system, behaviors, and filed combined with autonomy theory and publicchoice theory. This dissertation uses case study to analyze County H on autonomousbehaviors on organizing financial income and expenditure. It comes to the conclusionsthat the existing financial autonomy system is inefficient. The autonomy, due to thedrawbacks of present system, encourages economic development and enhancesgovernmental financial ability to some extent. On the other hand, financial autonomyhas certain disadvantages. It will cause waste of financial funds, disordered economicdevelopment, and inefficient public supply. The county financial system can bepromoted in accordance with the following three conditions including identifying localgovernment behavioral framework, consolidating regulation, and enhancing autonomy.In doing this, financial system can be focused on public and social aspects.In fiscal governance, local governments play a very important role in the politicaland economical system, which are taken as key factors for understanding and improvingfiscal governance. How to cultivate, to promote local spirits and how to get incentivesright in local governance are important issues to fiscal researchers. As a complicateproblem, the cultivation and promotion of local spirits need fiscal decentralization andright incentives for central and local government in China. This paper analyzes thepositive role, its condition and limits of local spirits in Chinese fiscal governance.Finally, this paper provides approaches to perfect formal fiscal institution to contribute to cultivate and to promote local spirits in Chinese fiscal governance. According to theanalysis, this paper asserts that the county-level government fiscal has a double nature,namely the expansionary and non-normative characteristic in its revenue organizing andthe constraints characteristic in its spending. Theoretically, fiscal decentralization worksonly when the country-level government has enough fiscal autonomy andinstitutionalized behaviors. Finally, this paper provides some approaches to perfectChinese fiscal institution to make full use of the country-level government fiscalautonomy.