Study On Financial Constraints On Government Fiscal Performance

The optimum of Government Fiscal Performance is a objective of every government. The traditional theory emphasize constraints the government's fiscal behavior by institutional and moral mechanism. To ensure achieve well fiscal performance. The basis point of moral constraints is introduction or suggests the government abide some basis fiscal criterion. The government fiscal balance is the oldest guide line.The cognition base on the moral and institutional to constrain the government's fiscal behavior produce a broad influence in the real public fiscal operation. It has been accepted by most people. Just about the point of view of the basis of constraint the government's fiscal behavior, the modern social have been established various institutional arrange to constraint the government's fiscal behavior and avoid the fiscal performance worsen and the subsequently severity result. However, in the most time, the constraint of moral and institutional can't efficiency exertion action. The experience fact indicated that the constraint on the government's fiscal performance is necessary but not absolutely. The insufficiency and weakness of moral and institutional clearly indicated that we need a stronger mechanism to constrain the government's fiscal behavior and macro-fiscal performance.The dissertation describes the constraint of financial on fiscal performance due to the assuming that money market cans reaction the relation information. There are a number of evidence in practice thus this consider is authentic on theoretic. Capital market efficient theory proof this attractive theory. It discover the truth is whatever the market is stronger, semi-strong or weakness capital market, it can absorb the information and reflect to capital price. The efficient theory can be expanding to public fiscal field. The capital market not only can response the the information from enterprises but also can response the information from government fiscal performance. The evidence indicate that money market can react the fiscal information not only exist in the real world but also exist in theory. The logic explains can be draw that money market is changeability, the finance is opening and the country's risk is evaluated. The development and opening of Chinese finance increase the reaction of money market to fiscal performance information. At the view of anticipate theory and government's accounting basal, once the information of government's fiscal performance worsen leak to money market, the capital market will increase the cost of capital and politics, weaken the three basic approach to prevent the further expand and improved fiscal performance. This action more notability in opened market than in closed market.The fiscal transparency is the efficiencies constraint to the fiscal performance beside the open money market. The opportunism behaviors which escape supervise and punish by money market lead to worsen the fiscal performance when the necessary fiscal transparence absented. Because of this, the international communities expedite the course of fiscal transparency in the last 20 years. The self-questioning base on a series financial crisis and their painful outcome lead to the international social put attention to the fiscal transparency since 1990's. the fiscal transparency is the key of good public governance. The good public governance promote increasing and stability of the macroeconomic. Although the international criterions of fiscal transparency do not constrain the Chinese government but it is appearance that China can not dissociate from this course. The press of improve fiscal transparency will be increase with the process of temporal. It need improve the fiscal transparency on many aspects. This will create a basic premise condition to constrain the government's fiscal behavior and improve fiscal performance by opened money market.