Evaluation On Equity Effect Of Public. Spengding Institution In China

Since Reform and Opening up, China has kept on running after the economic efficiency of public spending while the equity is neglected. So when the economy grows to a certain level which means per capita gross domestic product is more than 1,000 U.S. dollars, the importance of the issue is highlighted. Therefore, evaluating the equity of public spending since Reform and Opening up to is a very important issue. The unfair results of China's public spending are due the unjust system, the unjust procedures and the unjust rights; We can not solve the problems of social equity only by transfer payments.This paper takes social equity objectives as a start-point, reveals people's awareness of the role of the State through the evolution of state functions; then discusses the systems to achieve fairness and justice, aims at building the theoretical foundation of this article; after that, this paper analyzes the evolvement of the public spending institution since Reform and Opening up, dissects the scope of public spending. On the base of theoretical analysis, this paper measures the equity of public spending by large amounts of data. The measuring is expanded at two aspects, one is from the perspective of urban and rural areas, and the other is from the perspective of classes. I use different equity indexes to measure the fairness for accuracy. I also identify the factors which affected the fairness of public spending to find a reasonable explanation and feasible policy adjustments of public spending inequity. This paper researches the relationship between public spending, income distribution and economy growth by bringing public expenditure into endogenous growth model to estimate the equity of public spending logically.This paper comprehensively uses research methods Marxist classes-division research methods, institutional analysis of Institution Economics and interest groups model of New Political Economy. On the basis of the qualitative analysis, I measure the equity of public spending by collecting large quantity of historical data. In addition, in the study of the evolution of the system, I use research methods of Historicism.The Framework: The theoretical basis of this paper is Fair Just Theory. Government must reversely allocate public spending, that is, high-income people access to lower public spending and the lower income groups receive a higher public expenditure, which can also be called"reverse fairness"."Reverse fairness"can be realized only by political mechanism, and the realization of social equity is on the theoretical basis of Fair Just Theory. Second, I review the practical methods to measure equity on the basis of discussing the theories of realizing justice and fairness by government.Third, I research the transformations of China's public expenditure system. I define the concept of public spending and measure the gross number of public spending.Fourth, after measuring the gross number, I measure the urban and rural areas structure and class structure. Then I calculate the equity index of public spending allocated between urban and rural areas and among classes by method of measuring equity.Fifth, after calculating the equity index, I analyses the reason for the inequity of public spending distribution between districts and classes by statistical description and econometric methods. And I evaluate the equity of public expenditure system according to the normative criterion given by antitheses; I research the influence of public spending equity to economics, income distribution and society development by using economic growth model.The research structure and contents are as follows:Chapter 1 is"Introduction". This chapter consists of 4 sections. Sectionâ… analyzes the actuality of China's public expenditure and raises the issue of evaluating its equity. Sectionâ…¡summarizes related literatures on public spending. Sectionâ…¢gives the basic research ideas and methods. Sectionâ…£discusses the research frame and innovation.Chapter 2 is"The decision-making mechanism and measuring methods of equity". This chapter consists of 5 sections. Sectionâ… "State functions and public choice"discusses two issues: the evolution of state functions and public choice theory. Sectionâ…¡"Overview of national fairness and justice"focuses on the theory of fairness and justice, civil rights and redistribution in the political ethics philosophy and related economic research on the efficiency and fairness of public spending. Section III"Interest groups: determining factor of public expenditure"raises the issue of China's interest groups'role in political and economic areas. Sectionâ…£is"Redistribution model of new political economics". Section V is"Evaluation methods of equity of public expenditure".Chapter 3 is"China's public expenditure system". This chapter consists of four sections. Sectionâ… "The determinative system of public expenditure of Chinese government"discusses the operation process of government in three aspects: political system, decision-making system and interest groups. Section II"Evolution of the financial system"analyzes the evolution of the financial system and budget management system and its existing problems from the public point of view. Section III is"The content and classification of budget income and expenditure". Sectionâ…£"Data for measuring fairness of China's public spending"Chapter 4 is"Measurement and analysis of the equity of China's public expenditure in urban and rural area". This chapter consists of 3 sections. Sectionâ… "The equity measurement and analysis on public expenditure in urban and rural area", estimates the trends of Gini Coefficient of urban and rural public expenditures, per capita public spending gap between urban and rural areas and urban-rural relative structure factor. Section II"the urban and rural area tax burden and the interests destination of public expenditure", estimates the gap between the urban and rural area's total tax burden, and does a comparative analysis of the tax burden and interests destination of urban and rural areas. Section III"Analysis of China's public expenditure fairness between urban and rural areas"explains the most important reason why Gini Coefficient of China public expenditure in urban and rural areas by econometric methods.Chapter 5 is"Equity measurement on estates of China's public expenditure". This chapter consists of 4 sections. Sectionâ… "Measurement of public expenditure benefit destination among estates", estimates its tendency, its gross proportion distribution among classes and per capita benefit in each class. Sectionâ…¡"Measurement on public expenditure equity among estates", finds out the main factor resulting in the unfairness by econometric methods. Sectionâ…¢"Measurement on revenue contribution equity among estates", judges the equity of per capita revenue contribution among estates. Sectionâ…£"The equity of financial revenue contribution and public expenditure interest destination"discusses the relationship between financial revenue and equity of public spending benefit destination and remarks on itChapter 6 is"Evaluation on equity effect of China public expenditure". It consists of 4 sections. Sectionâ… "Evaluation on equity effect of China public expenditure in economy" raises an economic growth model and uses public expenditure's equity data to empirically analyze the relationship between public expenditure's equity and economic growth. Sectionâ…¡"Evaluation on income and distribution effect of China public expenditure equity"do empirical analysis to interpret inequity's effect on income and distribution's imparity. Sectionâ…¢"Evaluation on social effect of China public expenditure equity", empirically analyzes the public expenditure equity and social development. Sectionâ…£is"empirical analysis on relationship between China's public expenditure equity and technology development". Innovation:(1) Analyze framework. This paper puts forward the evaluation of public expenditure's equity for the first time. It sets out from Fair Just Theory., combines Marxism's classic analyzing method, system decision and evolvement model of Institution economics and the policy-economy model of New Political Economy together.(2) Evaluation method. This paper uses new statistical method, it measures equity index of public expenditure in urban and rural area and in each estate.(3) Evaluation mechanism. This paper comparatively analyzes the rationality of equity of public expenditure in urban and rural area and in each estate, and evaluates the equity of China public expenditure. I also use the new economic growth model to evaluate the economic effect, distribution effect and social effect on the inequity of the public expenditure.(4) Data .The essay estimates the data of public expenditure in urban and rural area and in each estate from 1978 till now, gets the gross income, per capita income and equity index. I also calculate the data of opportunity equity and result equity, the distribution data of public expenditure in urban and rural area and in each estate from 1978 till now. Then I estimate the gross contribution, per capita contribution and equity index. I evaluate the Gini Coefficient of income distribution from 1980 to 2005, and then use it to calculate the economic growth rate which includes social welfare evaluation. I calculate the public expenditure including social welfare evaluation by using the public expenditure's equality index.The defect of the essay: (1)Because some original data are unobtainable, I have to use projection methods such as extrapolation. So there is inevitable deviation of measured data, but that doesn't affect the tendency of movement.(2) As focus on the measure of equity, this paper uses the traditional Econometric analysis methods.