Research Of County-level Financial Risk In Western Poverty-striken Areas

It is always found in every corner of newspapers that discussion and research about state security and financial risk involved in state economic safety and political stability since the outbreak of asian financial crisis. In 2007, the outbreak in the U.S. Sub-premier crisis, which triggered the financial crisis to the economic development of the world brought grave disaster.Financial risks and economic safety are no longer the concern of bankers and economists.To some extent, Politician put more attention to the impact on political stability, political safety brought by the financial risks.We may say:the financial crisis invoked the sense of safety and risk.In fact,financial risks and safety should be highlighted,because financial crisis would turn to be public financial risk. Public financial risk is the core financial safety in any state. In public's opinion,public finance has conpulsory support of the states regime.Actually it is not,although it has the support of state regime,statescanenlargeits income by force,such as,taxes,currency,which makes the financial risk have been strongly enshrouded.But the finance risks have a extend content,including:finance revenue risk,financial expend risk,financial deficit risk and government debt risk.Each should be study carefully, we must nip any risks in the bud and take precautions.Because finance safety determines the states finance safety and social stability. So we must emphasize public financial safety,study carefully and rise some suggestion to resolve the public financial risks.Finance risks behaved in central and region financial risk.It can be divided into Eastern developed region and Western poverty region according economic progress in region financial risk.Now we can analyse the national debt--the intuitionistic figure, the direct result is the fast expanding in central government debt—from 331 billion￥yuan in 1998 to 2384.3 billion Yyuan in 2007.Above is one aspect of central debt risks,and region area is even worse Dr.Wei JiaNing, who works in Development and Study center of State Department,lectured in'International Proseminar of Region Debt Problem'that'In present China,region debt risks has succeeded than other financial risks to be the top killer of threatenning Chinese economic safety.'.'The debt risks local government loaded is heavy and of variety,has been beyond imagination,all levels of local government has loaded some debt to some extend, how to settle risks has become the urgent affairs.'This thesis will firstly introduce the cut-in of the mentioned problem, theoretic and practical meaning of this thesis, study method,scape,logic framework and creative ideas of this thesises in the leading part,to set the keynote of thesis and base body part of this thesis.The first part is about the status in quo of study and the development trend in home and abroad.The writer has summarized the former fruits and comments on those problem in it through the following content:The concept financial risks and local financial risks,connotation and category,the cause and management of locial financial risk,including solution and supervising parts.The ideas are as follows:There are some problems after study many scholars'study on local financial risks.1.Shortage of theory study on county financial riskPresently,scholars'study focused on the central government and the general local government financial risks. We know that the local government, provincial and municipal levels of government have surplus in their financial situation, the probability of financial risk is very low, because the provincial, municipal governments can implement the right of adjust through the central government's subsidies and the lower level revenue to alleviate the financial difficulties, so it has more room of turnabout. And at the county level, the financial turnabout room is even smaller, in the event of financial risks it would be difficult to the release. In fact, in our country, the possible outbreak of financial crisis can only be found at the county level, especially county financial system implemented the'Township Finance managed by County'. Research financial risk at the county level,in particular,the poverty-stricken areas of county level is of great practical significance. However, scholars'study do not dig into the county level, but generally talk about the financial risk. 2. Realistic and specific enough, there is no better combination of the latest policies and changes in the state the latest situation at the county level.County finance (in particular, implementation of "rural county fiscal management" post), has become a national and local fiscal base, the rural tax reform, the state has increased the support for the three rural issues, strengthen the "new socialist countryside" construction, The introduction of such a large number of farmer-friendly policy measures should be implemented by the county finance. Then, after the implementation of these policies the financial running of the county affected? We only have connection with reality, the risk from the financial point of view in order to evaluate the merits of these systems, or implementation of these policies on the county-level impact of financial risk. Situation.3. Inadequate cognize about financial risks and recognition of the harm financial risks brought,and insufficient emphasize of harmness brought by.the financial risks.Existing literature on the harm of the financial risks,basically are investigated from the economic level, with little attention to the financial risk of political influence. In fact,the rise and fall of dynasties are closely linked with financial risks, we can review the replacement of dynasties by financial risks.Every prosperous period in the history has low financial risks or even no risk. And dynasties replacement is often accompanied by the outbreak of the financial crisis. It is the cumulative financial risks following evolution of Institutional Change: Financial risks arised-the financial risks accumulated-Financial crisis-increase taxes to deal with the financial crisis-heavy taxes forced the peasants to resist-further increase taxes to suppress of peasant uprisings-more peasant resistance-dynasties perish. In fact, the demise of the feudal dynasty in our history can checked by this aspect, The existing scholars did not recognize that the financial risks'harm, and that financial risks and the country's politic have high relevancy.On this basis,the author presents his direction and theoretical framework:to logicly begin with risks, uncertainties,defined financial risk, county financial risk and other related concepts and analyzed their content, nature and category,laid the theoretical basis follow-up writing for the thesis.Chapter two is a theoretical analysis of local fiscal risks. With risk matrix, financial and economic theory, government officials such as budget maximization theory analysis provides a theoretical basis for the thesis.Chapter three is the poor western region the status of county-level analysis of financial risks. First introduced in the poor western region's economic and social development in the status quo, and then analyze the financial situation of the poor western regions, and then presented a detailed description of the western county-level poverty-stricken areas of the three aspects of financial risk-the risk of fiscal revenue at the county level, county-level risk of financial expenditure, county-level deficit debt risk. County-level fiscal revenue risk is mainly manifested in:local shortage of disposable financial resources, fiscal revenue quality, sources of income structure is irrational three areas. The risk of financial expenditures at the county level financial expenditure, mainly from county size, structure and efficiency of three areas to elaborate. County deficit debt risks arising from the debt risk from the direct explicit, direct implicit debt risk, or have explicit or implicit debt risk and debt risk four angle as well.Chapter four analyze reasons of county financial risk in western poor areas.In this chapter,author analyse the background and the reason of county level financial risks in western poverty stricken area. At the same time the use of public choice theory of corruption in the public domain due to the economic analysis of financial risks.Firstly,the economic mechanism of financial risks-analysis of economic mechanism in the west poverty-stricken areas county-level financial risk-the backward economic development and balance of payments resulting sharp conflicts. And then the structual reason of financial risks.Firstly,inherent factor in Poverty-stricken areas:natural,demographic, social and other factors. Secondly,the functions of the government and the market is not clearly defined, lack of government functions at the county level, both offside and dislocation; Thirdly, the financial system deficiencies, including the tax system in the transitional defects and unreasonable transfer payment system,not a reasonable financial supervision system;fourthly,the mechanism of people,including short-term rent-seeking behavior and corruption.2 of this chapter analyze thorough the reasons of the short-term behavior-it's the micro-and macro-system of incentives and rent-seeking corruption problem, including its meaning, causes and the financial economy. Chapters five and six are about resolving and preventing institutional arrangements and policy recommendations related to financial risks in western poor county areas. Specifically, Chapter five is a micro policy recommendations, including:1.Set up steady growth of fiscal revenue mechanism, resolve the risk of county fiscal revenue. Mainly includes three aspects:First, to develop the county economy,tamp financial foundation; second is to optimize the taxation system and the collection and management system, and resolve tax risk; three are to strengthen the regulation of extra-budgetary revenue.2.Optimize the structure of financial expenditure, and resolve county financial risks. Mainly includes the following three aspects:First, reasonable definition of the scope of county financial expenditures; the second is to optimize the structure of county financial expenditure; the third is implementing performance budget, improve efficiency of financial expenditure.3. To take various measures to defuse the risk of debt at the county level.Mainly from the following aspects:First,improve the direct debt management system;Second,amortize old debt, classification on the basis of comprehensive uncover old debt; three are strictly controlled at the county level add debt scale; four are set up Financial sinking fund and the risk of early warning systems, resolving and preventing the risk of sounding financial debt.Chapter six is a macro institutional arrangements, including:1. norms of government functions, build a public finance system. These include market failures in accordance with the guidelines to clarify the relationship between the government and the market, focus on management of government functions offside, vacancy and dislocation; reform the existing tax system and transfer payment system, improve the poverty-stricken areas west of the county-level fiscal disposable income to alleviate the west county-level poverty-stricken areas of financial risk2.Improve financial supervision and management system. Mainly includes three aspects:First, to strengthen financial supervision and legal system, and improve financial supervision and legal system; Second, building a "life-wide, sub-level" complex financial supervision system; three are set up at the county level and improve financial supervision mechanism. 3, System innovation, governance of corruption, rent-seeking. because of Rent-seeking corruption is based on rent, and the rent the existence and the supply-demand relationship with the specific institutional arrangements have a direct contact. Fundamental problem of government corruption, it is necessary to carry out institutional reform and institutional innovation to change the rental supply and demand conditions. First of all, the rent dissipation mechanisms should be set up, including decentralization, to take measures to eliminate monopolies and privileges of the economic rent, reform foreign trade system, the elimination of import and export of rent, set up auctions, bidding, such as rent dissipation mechanism. Second, through institutional innovations to reduce the demand for rent, set up a strong and effective supervision of punishment mechanism, through the administration of justice to govern rent-seeking corruption. At the same time, to carry out ideological and moral education, so that rent-seeking from the bottom of his heart there is a non-black and white moral consciousness, the result of rent-seeking to create a sense of inherent aversion to change its preference system, increasing the cost of its rent-seeking function, take the initiative give up the rent-seeking activities.4. Reform on the official examination system of promotion. First of all county officials are establishing a correct view of achievements, which is a comprehensive, practical and people's concept of scientific achievements. Followed by the reform of the current cadre performance evaluation mechanisms, greater emphasis on economic, social, cultural resources and environment in a comprehensive assessment, greater emphasis on people-oriented, pay more attention to the potential performance and long-term performance. Third, the term of office of officials of the reform of the system and set up the outgoing official duty tracing system. Four are from the West of its civil service, reforming the cadre promotion system, the implementation of the "two officials separately " - " Administrative Officer" and "officials."There are severial creative points in this thesis:1. Putting the focus on county-level poverty-stricken areas of the western systematic study of the financial risk, you can fill the gaps in the theoretical studies. Previously, scholars focus of the study focused on the central government and general local government fiscal risks. This article focuses on the county level, in particular the problems are most acute in poor areas of the county-level financial risk, even if the theoretical study of the rich, but also has great practical significance, which is the fundamental topics of the reason why authors, but also will become the article the source of innovation lies.2. Systematically expounded in the poor western region the status of county-level financial risk, and on the formation mechanism of in-depth analysis. Papers focus on county-level poverty-stricken areas in western finance income risks, expenditure risk, the risk of deficits and debt. From the economic, institutional and behavioral analysis point of view the reasons for the formation of financial risk.3.Deeply analysise of governor's behavior and policy's effect on formation and solution of financial risks.The thesis analyze the reason,solution of county financial risk;and provided a deep,full and systematic study on this issue,especially specific analysise of the offial bahavior through public selecting theory,system tool.It can be thought that offial bahavior and policy are all the hard point to solve the problem.4. To resolve aspects of the financial risks, with particular emphasis on county-level poverty-stricken areas in western finance the first should be based on self-management, self-control, efforts to defuse, followed from a macro point of view supported by the necessary policies and systems for the county-level poverty-stricken areas to create conditions for the financial.5.In this paper, transfer payments, the introduction of mathematical model of the factors affecting the transfer payments quantitative analysis to reduce the subjective factor, for the establishment of a scientific and rational system of transfer payments were discussed.6. Innovative nature of the establishment of government debt accounting system in order to strengthen the daily management of debt.The thesis from two aspects from the normative and empirical study of the causes of the financial risk at the county level and governance.Certainly,because of the personnal competence and uneasy to collect the data especially data on county concealed debt, this thesis has its deficiency. Second,there are a lot of aspects and complex causes in financial risks,which is beyond the scape of economy,it can be involved in politic,economy,culture,live etc..So the institutional arrangment and policy suggestion may undoubtablly be partial.