| With the continuous improvement of China's economic level, governments'financial revenue increase significantly. At the same time, governments'financial expenditure shows a progressive growth as well, which share of GDP increased from 16%in 2002 to 22.4% in 2009. But on the contrast, majority of people are not satisfied with governments' public services in education, health care, environmental protection and so on. The allocation of provincial governments'financial expenditure in China is reasonable or not? How is the situation of provincial governments'supply of public goods? Provincial governments'financial expenditure efficiencies are high or low? Researching on these issues will bring important theoretical and practical significance in deepening China' financial system reform, optimizing the structure of governments'financial expenditure, establishing new concept of financial cost, building service-oriented public finance system, improving the efficiency of financial expenditure and providing better public products and services to economic development and people's all-round development.Based on the reality situation of provincial governments'financial expenditure and the supply of public goods, this paper attempts to empirical study provincial governments' financial expenditure efficiencies through using the theory of financial decentralization, the theory of public finance and some appropriate econometric methods.First, the background and significance of studying provincial governments' financial expenditure efficiencies are presented, researches on financial expenditure efficiencies in domestic and foreign are reviewed and analyzed, and some problems in studying the financial expenditure efficiencies of provincial governments in China presently are pointed out in this dissertation. Second, the stage evolution of Chinese financial system are described and carded, some correlation theories of financial decentralization are induced and analyzed, the theory of public finance is introduced, concepts of public goods are introduced and classified and the situation of public goods'supply are described and analyzed. Third, the connotation of the financial expenditure efficiencies of provincial governments are defined, the parameter method and non parameter method of measuring efficiency are introduced, and then the advantages and disadvantages of these two methods are analyzed and compared.On the basis of theoretical studies, this paper also evaluates provincial governments' financial expenditure efficiencies empirically through using methods of Stochastic Frontier Approach (SFA) and three-stage Data Envelopment Analysis (DEA).With Stochastic Frontier Approach (SFA), the paper evaluates the financial expenditure efficiencies of provincial governments and analyses the key determinants of the financial expenditure efficiency. The analysis is applied to a balanced panel of 26 provincial governments over the period from 1978 to 2008. The results show that:(1) Governments in central China had more efficient financial expenditure than the governments in eastern and western regions of China; (2) The fiscal decentralization reform in 1994 do improved provincial governments'financial expenditure efficiencies dramatically in China, but the efficiencies dropped gradually after 1994; (3) The local financial autonomy, the per capita GDP and the per capita budget revenues had a significant negative impact on provincial governments'financial expenditure efficiencies, the population density had a significant positive impact on provincial governments' financial expenditure efficiencies yet.Based on the three-stage Data Envelopment Analysis (DEA) model, through adjusting the environment variables and the random factors, this paper researches on the financial expenditure efficiencies of Chinese provincial governments in 2009. The results show that:(1) View from the national average, the financial expenditure efficiencies of Chinese provincial governments had a greater increase after excluding impacts of environmental variables and statistical noises. (2) The high population density was beneficial to provincial governments'financial expenditure efficiencies. However, the local financial autonomy, the per capita GDP and the per capita budget revenues had a negative impact on provincial governments'financial expenditure efficiencies. (3) From the zoning perspective while impacts of environmental variables and statistical noises are excluded, the central region still had the highest efficiency, and the efficiency of western region had the largest improvement. (4) To the efficiency value of 0.9 as the critical point, Chinese provincial governments can be divided into four types according to pure technical efficiency and scale efficiency. So each province should promote the management level or expands the public goods investment level respectively to improve the financial expenditure efficiency.According to the results of the empirical study, this paper analyzes reasons which caused low financial expenditure efficiencies of provincial governments, and finally puts forward some recommendations how to improve the supply of public goods and the financial expenditure efficiencies with targeted. |
