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Research On Intergovernmental Fiscal Relations And Effects Evaluation Between The Central And Local Governments In China

Posted on:2016-09-21Degree:DoctorType:Dissertation
Country:ChinaCandidate:H B HuFull Text:PDF
GTID:1109330470478226Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
The construction of all-sided socialist well-off society has already become the theme in contemporary China. On one hand, all-sided construction of the socialist well-off society requires the public finance of scientific arrangement, standardization, refinement and high-efficiency; on the other hand, public finance requires the construction of reasonable fiscal relations between governments. Intergovernmental fiscal relations generally reflect economic and politic relation changes between the central government and local governments. Based on the bulletin about fiscal system reform of the Third session of the Eighteen Central Committee of the Community Party, including establishment of the modern fiscal system, exerting initiatives from the central government and local governments, improvement of the budget management system and perfection of the tax system and the foundation of the fiscal system of case-right and expenditure responsibility, all of which require optimization of the fiscal relations between the central government and local governments. Since about thirties years of reform and opening up to the world, enormous achievements in economic development have been made. Significant increases can be seen both in fiscal revenue and governmental expenditure of the governments at all levels, and the incidence of the institutional changes of the fiscal relation between the central government and local governments are unavoidable. After the division of tax revenue which was implemented in 1994, more and more disharmonious situations have occurred between the governments at all levels. Therefore, according to the claim of fiscal system reform of the Third session of the Eighteen Central Committee of the Community Party, the composition adopting and using the theory of fiscal federalism to research the intergovernmental fiscal relations has important theoretical and practical significance.This article, from the perspective of fiscal federalism, has systematically assessed the path-way and economic effect of the society which were used to optimize the fiscal relations between the central government and local governments in China. Firstly, the article summarizes the former research findings including the concept of fiscal federalism, theoretical foundation, historical practices and experiences of institutional changes of intergovernmental fiscal relations, and constructs the theoretical framework of intergovernmental fiscal relations under fiscal federalism. Secondly, the article makes an empirical evaluation of the division between the governance and the property rights, institutional changes between tax revenue and non-tax revenue, existing problems, regulations of annual changes; also it presents the quantitative evaluation of the inner influences between the division of the tax and non-tax revenue and the economic growth. The results show that the division of the tax and non-tax revenue has engendered certain negative impacts on the Chinese economic growth, No matter the tax division or non-tax division, there exist nonlinear relationship between those divisions and economic growth, and’threshold point’ However, the real situation presents that those two have been far from their optimum ’threshold point’, and negative influences to the economic growth have been easily noticed. Thirdly, the article evaluates the existing problems of general transfer payment, pay benchmarking, transfer payment degree, transfer payment mode and standardization method since the division of tax revenue reform in 1994. Based on the angles of economic growth and basic public service equalization, it constructs evaluating model of the affects on basic public service equalization by general transfer payment, and assess such model empirically. Analytical results demonstrate that there have emerged significant effects of economic growth caused by general transfer payment between the central and local governments, but the effects of public service equalization is relatively limited and lacks flexibility. The special transfer payment of central-local governments plays an important role in inter-governmental fiscal relations, continuous improvements in the designation of special transfer payment system and the approaches of the allocation of funds promotes the efficiency of funding uses significantly, which, to a certain extent, eases the difficult situation of local finance. However the deep-seated contradictions and problems still have not been effectively resolved. Through constructing two-department economic model between central government and local governmental, the paper evaluates the efficiency of special transfer payment of economic growth effects and basic public service equalization effect as a whole; what is more, extending effect, extruding effect, leaking effect are assessed from its inner structure as well, and empirical examination to the special transfer payment are advocated. Results show that special transfer payment between the central government and local governments has relatively less positive effects on economic growth and public service equalization, compared to general transfer payment; special transfer payment for education whose proportion in the total special transfer payment has increased has confronted considerable growth. No matter in the whole country or in different economic regions, there exist obvious extruding effects and leaking effects in the educational transfer payment both at national level and regional level; and significant differences have existed in different economic regions.Based on the analysis above, the paper which combines with the macro-policy objective of government intervention in the economy, carries out analyses of the intrinsic influences between fiscal expenditure decentralization and those factors as economic growth, employment, income distribution and its influence, which are viewed as the standard of value judgment; moreover, from the perspective of the fiscal federalism, it not only empirically testifies the problem whether fiscal expenditure decentralization between central and local government has the ability to effectively fulfill harmonious interactions among three aspects named as sustainable economic growth, full employment and balance of income distribution, but also proves the existence of the optimal decentralization of fiscal expenditure. The empirical results show that whatever the single goal or integrating goals of social and economic development, with the construction of comprehensive well-off society having been further deepened, shrinking decentralization degree of the local government fiscal expenditure should be the development direction to the optimization of fiscal relations between the central and the local government. Finally, this paper puts forward the countermeasures to optimize fiscal relations between the central and local governments which include a reasonable division between the powers and fiscal expenditure responsibilities, a reasonable determination of the optimal degree of fiscal decentralization, rational divisions of the power in tax, tax and other revenue between the central and local governments. Besides, the increase of shares in tax for the local government are needed, and non-tax revenue be standardized between the central and local government; then, the absolute scale and relative scale of general transfer payments and special transfer payments should be adjusted and three-dimensional model of transfer payments should be established from various levels and perspectives; fourth, the structure of financial transfer payment between the central and local governments should be adjusted, balance transfer payment should be perfected, financial transfer payment of the supervision and evaluation mechanism should be established; financial relationship between the central and local governments in China should be comprehensively balanced. Those above measures can offer more opportunities to provide more useful basic public services and construct a well-off society in an all-round way.
Keywords/Search Tags:Fiscal Federalism, Intergovernmental Fiscal Relations, Fiscal, Decentralization, Fiscal Transfer, Effect Evaluation
PDF Full Text Request
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