Research On Provision Of Local Public Goods Of Fiscal Decentralization System In China

During the late of 20th century, the development of western public finance had experienced the transition from'government revenue and expenditure'to'public economics'. In this process of transition, the theory of public goods has been widespread concerned. Meanwhile, the theory of fiscal decentralization that has grown up on the 1950's provides the theory basis for local governments efficiently providing local public goods. Since reform and opening up, China's public financial system has basically established fiscal decentralization system after over 20 years'development and changes. The function of governments in China has also transformed. China's governments have gradually withdrawn from the competitive fields and have turned to provide the public goods and services for the entire society. Meanwhile, along with the development of decentralization reform of the fiscal system, the central government continued gives some duties to provide public goods to the local governments, which causes the majority of public goods and services provided by local governments now. However, the current academic field pays less attention to the issues of local public goods and lacks the depth and systematic research on them. Therefore, in this context, research on the provision of local public goods of fiscal decentralization system in China has important theoretical and practical significance.This paper takes local public goods theory and fiscal decentralization theory as the theoretical basis and applies the theoretic analysis in conjunction with empirical analysis, comparative analysis, quantitative analysis combined with qualitative analysis, Game analysis and other methods to research provision of local public goods of fiscal decentralization system in China. The main research work of this paper includes: (1)To establish and summary the local public goods theory system based on absorbing the predecessors' achievements; (2) To analyze and evaluate the actualities of provision of local public goods in China with the empirical analysis and make the regression analysis about the provision of local public goods and fiscal decentralization system; (3) To elaborate the problems existing in the provision of local public goods from several aspects, such as financing of local public goods, inefficient provision and regional differences; (4) Within the framework of the standard fiscal decentralization system, to explore the reasons for the problems existing in provision of local public goods and to make the in-depth analysis. Based on it, policies and suggestions to provide the local public goods effectively in China are put forward.This dissertation includes six chapters.Chapter One is introduction. The theoretic and practical background of current research on local public goods is introduced in this chapter. This part also analyzes the significance of the study on local public goods, the research ideas, research methods adopted in this dissertation as well as the innovation and inadequate of the dissertation. In this chapter, the relevant literatures on local public goods at home and abroad are summarized and evaluated. And the main concepts in the dissertation are defined in the chapter.The theory of local public goods is analyzed and summarized in Chapter Two, as the theoretic base of the following research. Firstly,the meaning and characteristics of public goods are expounded and the condition of the efficient provision of the public goods is researched. And then, the definition, characteristics and classification of local public goods are analyzed and the Pareto condition of the efficient provision of local public goods is put forward.The theory of fiscal decentralization is expatiated in Chapter Three, providing a theoretic basis for the efficient provision of local public goods in multistage government nation. Firstly, the meaning and the main content of the theory of traditional and new fiscal decentralization are expounded. And then, the advantages and disadvantages of fiscal decentralization as well as the function lacation of central government in fiscal decentralization system are analyzed.The empirical research on the actualities of provision of local public goods of fiscal decentralization is carried out in Chapter Four. The research content mainly includes the system background of provision of local public goods in China, the evaluation of fiscal decentralization system in China, the analysis of the actualities of provision of local public goods and regression analysis about the provision of local public goods and fiscal decentralization system in China.The subsistent problems of provision of local public goods of fiscal decentralization system are studied in Chapter Five. The problems of provision of local public goods mainly includes: financing problem of local public goods, the inefficient provision of local public goods and the regional differences problem.The reasons for the problems of provision of local public goods are studied in Chapter Six and policies and suggestions to provide the local public goods effectively in China are put forward. The findings indicate that the reasons for the problems of inefficient provision of local public goods are the defect in the fiscal decentralization system, the incompleteness of transfer payment system, the distortion of the local officers'behavior, the current political performance evaluation system, the soft budget constraint of local government, the lack of the smooth demand-revealing mechanism, etc. So it is necessary to reform and perfect the above system in order to effectively provide local public goods of fiscal decentralization system.