Application Research Of Shaanxi Local Fiscal Risk

The problems that Shaanxi local finance facing have become clearer and clearer with deepening of system reform, while risks going worse. This has been potential threat to both of financial stabilization and economic sustainability. That's necessary and meaningful to pay attention to and make research on local fiscal risks, give some advices of institution arrangements for the goals of addressing local fiscal risks and keeping healthy development of local economy.In this thesis, the author gave analysis on cause of fiscal risks, influence factors and status quo, also observation on debt risks of local government, risks of finance revenue and expenditure and public risks of local government, and made intensive study on fiscal risks. On the base of reviewing risk theories, government debt theories and fiscal risk theories from domestic and abroad, the writer analyzed the mechanism of local fiscal risks from two angles of local government behavior and local finance function. And with the consideration of influence factors of local finance risks and local finance function, further analysis on local finance risks in Shaanxi Province and advices against local fiscal risks were given. At last, the system of risk evaluation and supervisory control of Shaanxi local finance was established, and the local finance status in Shaanxi from 2001 to 2008 have been estimated and pre-warned, with measures of AHP comprehensive assessment, GARCH model, and KLR methods.As conclusion, it's viewed that the fiscal risks in Shaanxi Province are objective and controllable. To resolve the contradiction between risks and development, it needs to make round institutions on financial revenue and expenditure management, to attach importance to the whole procedure from budget making to expending control, and to build and perfect early warning system. For operation, Shaanxi finance department should build basic frame of public finance on the one hand, so as to supply public goods, service and support to adjust economy. On the other hand, the current finance risks should be responded positively, with policies and measures being studied and made.In this paper, three innovations are made. The first is re-reorganization about the cause of finance risks. For the opinion of author, it is mainly the deviation of government behavior that pursuing the maximization of monopoly interest which influence the systems of inter-government finance and finance management. The second is analysis of influence factor of finance risks. Normally, under the control of finance, public risks, debt risks and operating risks are running in conditions of circulation, but finance risks and government crisis will happen while economy running out-of-balance. In addition, some factors within finance system, like halfway reform and soft-constraint of budget, could also influence the operating of finance system, and sometimes become part of systematic risks while it growing. The third is building an initial system of finance risk assessment and early warning which fitting the characteristics well of Shaanxi province. With the system, the local finance status in Shaanxi from 2001 to 2008 have been estimated and pre-warned, with measures of AHP comprehensive assessment, GARCH model, and KLR methods.