The Research On The Spatial Effect Of Public Financial Expenditure In China

Since China launched the reform and opening-up policy in 1978, China has procured speedy economic growth. Meanwhile, discrepancies in levels and quality of regional economic growth are incresing. The regional disparities are aggravating obviously that deviats the target of co-prosperity and harmonious society in China. China's policy of public expenditure is playing an irreplaceable role in promoting co-prosperity and harmonious growth. This thesis tries to find some effective methods for decresing the discrepancies in levels of basic public services and regional economic growth, and to table a proposal for improving the effect of China's public expenditure.From the perspective of space time, this thesis analyzes China's public expenditure policy, and expands the method of researching on regional coordination effect of the public expenditure policy. Under background of reform of China's public finance system, this thesis probes into the relationship between central government and local government, along with their function scopes. The author surveys the actions of central government and local government through simulation experiments. These above researches enrich the theories of region economic growth, the effect of public expenditure policy, government's action and policy evaluation. The conclusions provide decision basis for the reform of China's public expenditure, and some suggestions for realizing regional economic growth harmoniously. All of these have great significance for China to found our harmonious society.The overall conclusion of this paper:Using 2008 year's relational datas to estimate the endogenous-growth model including spatial relativity established in this thesis, the regressive result shows that the spatial relativity does exist in China's regional economic growth, and the unbalanced distribution of fiscal resource, or economic discrepancy among conterminous regions was not the root of unbalanced regional economic growth, the real root is abnormal competitions among local governments. These abnormal competitions consume the central fiscal resource excessively. Excessive consumption of the central fiscal resource induces low efficiency in public expenditure policy. The local governments making strategies based on regional economic growth rate or their own profits. But the central government making strategies based on countrywide harmony. So the game space comes out. Some developing regions apply the central fiscal resource for their own development, then after their advanced development they begin to play a game of "argy-bargy" with the central government for their political and economic benefits. In one time game, the local governments make strategies based on their own profit maximizing, and consume the center fiscal policy resource excessively, which makes the efficiency of fiscal policy resource decreased rapidly; from the repeat game, as the local government pursing for short-term benefits, the trigger strategy for cooperating to enhance the efficiency of fiscal policy resource can not be functioned and the Pareto effect game equilibrium can't appear.Through the simulation research on Swarm based on the game analysis, we can gain the same conclusions, and the simulation experiments prove that as long as the local governments'consumption of the central fiscal policy resource could get the positive profit then the local governments will consume the policy resource continuously which will finally make the whole effect of the central fiscal policy imperfect. In the same time, the simulation research shows that the supplements of fiscal policy resource from central government could influence the local governments'policy consuming decision, and the critical facts for local governments'strategies is the marginal consuming cost of the fiscal policy resource. The marginal consuming costs of the central fiscal policy resource will decrease the amount of the local policy consumption, as well as improve the whole efficiency of the central fiscal policy resource. Although the marginal cost will guarantee the whole efficiency of the central fiscal policy resource, it will affect the consuming decision of local governments, so this marginal cost can't be too high to utilize central fiscal policy resource fully. So this cost must be set appropriately in order to guarantee fully utilization and whole efficiency of the central fiscal policy resource for the perfect effect of central government's fiscal policy.There are four innovative points in this paper:(1) Based on the endogenous growth model, this thesis expands the research on the effect of fiscal policy to spatial dimensions, and supplies a gap of neglecting spacial factors in the traditional economic growth theory.(2) This thesis opens out the costs of the local government's consumption of the central fiscal resource and behavior choice between governments from one time game and repeated game separately, during the continuity of the fiscal policy.(3) This thesis makes empirical test on the effect of the central fiscal expenditure policy from spacial dimension, and explans the economic root of these spacial effects with the game theory.(4) This thesis sets up a game model, and discusses characters of the behavior when the local government consuming the fiscal policy resource supplying by the central government from one time game and repeated game. Then this thesis establishes simulation models on Swarm simulation platform for the game theory. These simulation models show the behaviors and the strategy choices of the local government dynamically, during the continuity of the fiscal policy. This is one innovative method of analysing macroeconomic policy.