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Research On Regionnal Gap Of Basic Public Services Under The Fiscal Decentralization System

Posted on:2012-01-12Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y B GuanFull Text:PDF
GTID:1119330368478313Subject:Western economics
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China is a transforming country with vast territory, large population and significant regional differences.Since the gradual market-oriented economic reform in 1978,China's financial system was changing from the centralization into decentralization. It can be said that fiscal decentralization reform has been an important part of China's economic transformation. The institutional arrangements made local government have the powerof residual claim and residual control gradually, so as to provide important incentives for economic development. However, with the positive effect of fiscal decentralization reform continuously releasing, the negative effects of local government competition began to become more apparent. One of the most concerned phenomenon is that the supply gap of basic education, health care, social security and other basic public services has not significantly reduced with the economy's growth, which leads residents of different areas have unequal basic public services, which is bound to endanger the construction of a harmonious society, coordinated and sustainable economic growth and stability. The Seventeenth Congress tells us that the Communist Party and the government eager to achieve the equalization of regional development by sharing basic public services equally. In this context, we must have the dynamic understanding of the disparity of regional basic public services; we must have a reasonable explanation of the formation mechanism of this difference; we must built the effective policy path to equalize basic public service. Therefore, this thesis follows the technical line of "ask questions, form hypotheses, construct the framework, empirical testing, problem solving",trys to reveal the internal mechanism of fiscal decentralization and regional disparities of basic public services in a unified framework, and finds the effective way of governing regional basic public service disparity which fits China's economic and political background.Chapter 1 is Introduction. This chapter describes the background, theoretical and practical significance.Based on this, it gives a specific theme of this paper, further gives proposed ideas, research approaches and research methods, also innovation and weakpoints.Chapter 2 dynamically evaluate the regional disparities of basic public services using the comprehensive evaluation methods. Reducing regional disparities of basic public services to achieve the equalization of basic public services is a dynamic process, we must establish a more scientific and reasonable evaluation index system to describe this process. So, this chapter built a comprehensive evaluation index system basing on considering the dimensions of basic public service.residents demands and local government expenditure preferences.This chapter empirically evaluate the disparity of regional basic public services and specific projects. The results show that the supply of inter-regional basic public services remains in disproportion, the eastern have more basic public services resources than the central and the western,while the disproportion of basic public services between regions are significant differences, especially of the most concerned public health,social security and basic education.Chapter 3 built a theoretical frame in order to study the formed mechanism of the regional gap,using new theoretical paradigm of political economy, in accordance with the internal logic of "background of economic system-fiscal decentralization-the heterogeneity of the local government competition-the gap of the financial capacity and the differences of expenditure preferences," China's financial system has gradually transited from the centralized model to the decentralized model with the econimy transforming. We can see that fiscal decentralization reform has been an important part of China's economic transformation. In addition, China has both the separation of powers in the economic field and maintaining centralized political field.This special decentralization model gives a double incentive structure to local government-financial incentives and political incentives, which together drive the local government to promot economic growth. Local governments compete to adopt a rational strategy of tax incentives to attract the inflow of external factor jurisdiction. This scarcity heterogeneity of local government tax competition will be different affection to the financial ability of local governments, which may makes relatively weak initial fiscal backward region into financial difficulties, thus widening the gap between regions revenue. Furthermore, the local government ask for transfer payments and resources from central government to get greater financial scale. The result of competition between regions will further expand the financial gap. In addition, local government spending preferences have spatial heterogeneity under the fiscal decentralization. Overall, the local government fiscal capacity and expenditure preferences directly affect the regional supply gap of basic public services, which in theory reveal the formation mechanism of the gap.Chapters 4 and 5 examines the relationship between the fiscal decentralization, local government fiscal competition heterogeneity and regional gap of basic public services gap. Specifically, Chapter 4 selects financial data of provincial areas after the reform of tax system, uses the Gini coefficient decomposition method, find out the formation mechanism of the regional fiscal gap. This research found that the overall inter-provincial fiscal disparities are still large. The decomposition of inter-provincial fiscal disparity shows that the local government tax competitive strategy wides the gap of inter-provincial fiscal revenue, and fiscal revenue is the main factor which caused the inter-provincial fiscal disparity.Fiscal transfers regions have not effectively balanced the financial gap. Therefore, the fiscal heterogeneity competition between local governments expanded the regional fiscal disparity. Chapter 5 uses provincial panel data to evidence the direction and extention.which fiscal decentralization and local government competition affect the local government expenditure preferences. We found that local government spending preferences has a spatial heterogeneity.Chapters 6 and 7 builds a policy system of reducing basic public services gap basing on the framework of fiscal decentralization system. The theoretical and empirical results show that the gap between basic public services is caused by local governments' fiscal capacity and expenditure preference, and the fiscal decentralization and local government competition behavior will profoundly affect the local governments' capacity and expenditure preferences. This means that, how to fundamentally reshape local governments, and enhance the response to the needs of the residents of public services and balance the financial ability of local governments, will be the main focus of the central government policy. In this concept, this chapter proposed practable ways to reform government performance evaluation system, in order to gradually narrow the regional basic public services' gap, and let residents living in any region are able to enjoy almost the same basic public services.Chapter 8 makes a systematic summary of the research and makes a prospect of the follow-up. With the new political economy theory and methods improving, how to make a theory and empirical research on the equalization of basic education resources, health resources and social support resources, will be a challenging subject which need us concern and deepen the study.
Keywords/Search Tags:Transition Economy, Fiscal Decentralization System, Local Government Behavior, Basic Public Services
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