Study On Regional Coordination On Economic Growth Basing On Public Expenditure Policy

Since China launched budget reform in 1999, the focus of reform has transformed from income transfer to expenditure management and implementation of the reconstruction, which is in order to further strengthen the role of public expenditure. Due to "Matthew Effect", the overall gap between regions has become increasingly prominent at the regional level of economic growth and quality. This paper sought to figure out specific path and policy to boost regional economy growth coordinative from the perspective of public expenditure system. And this will be useful to establish a harmonious society and maintain social fairness while avoid deviating from overall objective to pursue higher goals of fairness's uniform with efficiency.From the Perspective of space and time, the analysis not only enriches the effectiveness of public expenditure policy and methods, but also quantifies the effect on the results of economic growth research. Also it improves the measurement of public expenditure policies' impacts on economic growth from a more precise time dimension and space dimension perspective and enriches regional economic growth and public finance expenditure theory system. Therefore it is of great theoretical significance.Public expenditure policy plays a irreplaceable role in boosting national and regional coordinative economic growth, eliminating regional differences and achieving common development and common prosperity. The proper public expenditure policy can promote regional industry centralizing, regional economic growth, and the systematic regional public expenditure policy also can alleviate regional disparities, eliminate unbalanced regional development situation. Currently, China's public administration is experiencing an important transition period, it's top priority to study public policy expenditure, regional economic growth and harmonious development to provide a basis for decision making. And this answer the requirement to launch a harmonious society.(1)This paper studies:From the perspective of regional public, this paper intensively researches spatial influence mechanism of public expenditure policy's impact on regional economic coordinative development and time convergence trend, analyses the goal of public expenditure policy's regional space coordinative objectives, builds up the relevant regional system's welfare function model, and last supplies model analysis and supports to the existing regional public expenditure policy. On this basis, this paper studies the "fairness" and "efficiency" of public expenditure policy's coordinative mechanism. In time convergence of regional growth trend, this paper also analyses public expenditure policy's functions and contributions. These consequent phenomenon, conclusion and proposal supply new ideas and suggestions about how to promote regional economic growth's "fairness" and efficiency, and inter-regional economic growth convergence.(2)Innovation:1) In response to the regional "block economic" characteristics and under the outline of centre-periphery model, I redefine regional welfare system and elaborate on the significance and necessity of optimizing public expenditure policy. I examine the model with MATLAB simulation technology and demonstrate explanation power of policy and mechanism.2) The paper analyses the status quo of regional economy disparity and reasons of public expenditure policy. This chapter describes regional public expenditure disparity and the regional disparity after reform and opening up policy and explain the reasons for these policy. This paper uses local overflow (Local Spillover) model, expansion model, inter-regional transaction costs, regional economic growth, industrial clusters, public expenditure policy variables, as well as regional focus on space and nominal inter-regional income disparity to analyze the regional public expenditure policy's contribution mechanism to inter-zone economic growth3) The paper uses 31 provinces' panel data in 1990-2005 periods to distinguish public investment (public capital) from non-productive expenditure and make expansion for neo-classical economic growth model. On the basis of estimating samples of provincial stock of public capital, and with the aid of measurement demonstration test, the paper examine the convergence function of public expenditure policy imposed on regional economic growth. Meantime, considering the area terrain of public expenditure policy's impact on convergence of economic growth, this paper analyze regional public expenditure policy's function mechanism and contribution to regional economy growth convergence in a spatial dimension.(3)conclusions:1) proper regional centralization is the premise for optimizing regional welfare. Moderate centralizing will bring up increase to regional welfare system, however the excessive centralization will bring about negative externalities, and finally damage regional welfare system. If the Government improves inter-regional level, then it will helpful to make the region's total welfare optimal. The results strongly support unbalanced development strategy of China's public expenditure policy, and provides a new interpret for gap widening situation and necessity to modify public expenditure policy.2) under the baseline of regional supporting, public expenditure on economic construction and infrastructure have a positive influence on regional economic growth convergence effect, button terms of distribution of region in spatial economy, it will fuel regional economy unbalanced special development, and will sacrifice "fairness" o fulfill efficiency. Therefore, the regional support of the public expenditure policy-makers should pay attention to structure and scale, balance growth and fairness to realize coordinative development.3) Public expense policy which is helpful for the technology spillover could have positive externality in the time tendency and the space location at the same time, and also play an enhancing role in the regional economic growth convergence, spatial distribution equilibrium, and the overall economic growth of the regional system. In order to realize the coordinating regional economic development in fairness and effectiveness, as well as time and space, it is an indispensable way to increase the public expenses which is beneficial for the technology spillover. To put it in a more detailed way, it involves such public expense policies as the telecommunication, the internet, the build-up of personnel, the transportation, education, the public health and so on.4) As the economic convergence mode shows, though our country's economy has been developed rapidly, the problem of imbalanced development among provinces and regions has never been solved. Moreover, the bridge of regional economic gross is huge, but the growing speed has showed convergent tendency. On the basis of distinguishing productive and non-productive public expenses, it is found from the absolute convergence speed that non-productive public expenses have obvious negative effects on the regional economic convergence, while the productive public expenses have positive ones. What's more, public expenses including the technologic support in the corporation potential tapping and reform also have positive effects. On this basis, in order to enhance the coordination of the regional economic growth and increase the public expenses in the central and western areas, especially the public capital expenses, the policies and funds should be preferential to the western part so as to speed up the convergence tendency. This paper believes that the principle of optimizing regional public expenses policy lies in: maximizing the regional system benefits and taking both "fairness" and "efficiency" into consideration. Time and space are the basic dimensions for the policy adjustment and the request for regional centralization.Meanwhile, the paper points out the blind points of the regional public expenses policy which are the limitation of regional supporting policy, rationality of moderate trade barrier, requests of the regional integration and so on. This paper also proposes some suggestions in the aspects of grading infrastructure development, strengthening regional technology spillover, deepening the macro fiscal control and so on.