The Impact Of Fiscal Transfer Payments On Regional Gap Of Public Service

China economy has developed rapidly since the reform and open policy. But the basic public service and the gap between the poor provinces and the rich ones has enlarged. It includes the gap between the urban areas and rural and the regional gaps in basic public service. These gaps are due to natural conditions, historical and institutional reasons, which urgently need the government play a positive role, undertake the historical responsibility to provide basic public service to achieve the equalization.After the economy has experienced more than20years of rapid growth,China was carrying out the strategy of The Western Great Developing and the strategy of The Middle Areas in order to balance the development between various regions.After the implementing of "Tax sharing Reform", the fiscal revenue of central government’s has been grew greatly, the proportion in the total fiscal revenue has remained at more than50%. But the supply of public services mainly depend on the local government.To realize the equalization of public service goals, the financial support from the central government is necessary, so the vertical transfer payment from the central government to the local governments become an important means to increase the fiscal revenue of local government and to balance the regional differences.This dissertation takes31Provinces as a sample, calculates the equalization effect of the public services of local government after accepting the central fiscal transfer payment by the method of Panel Analysis in the years2001-2009. It points out that general transfer payments could effectively enhance the level of economic public goods,but has a low effect on non-economic public goods;while special transfer payment can enhance both economic and non-economic public goods level.The deep reasons include the backward political institutions, the incomplete tax system and lack of high level legal basis. Then it analyzes the factors of affecting the transfer payment distribution.The conclusion is the allocation of the transfer payment has not benefited to the backward areas.On the contrary, the higher the level of economic development of the province, the more transfer payments they get.In addition,political factors will be an important consideration in the distribution, the minority areas would get more general transfer payments, which reflects the stable nationality policy of the central government.In order to raising the basic public service level in China, this dissertation puts forward some policy suggestions which aims at optimizing the transfer payment system:(1) Increasing the special transfer payments which is used in education, medical and other fields in the western regions;(2) Regulating transfer system,integrating vertical and horizontal transfer model,consolidating tax return with general fiscal transfer,defining the standards of special transfer;(3) Improve the legal level of the fiscal transfer payment system,regulating clearly the legal status of the fiscal transfer payment parties, approval procedures, the basis of distributing;(4) Improving the fiscal transfer payment funds distribution system,transfer payment based on factor method is the requirement for perfecting the transfer payment systemhttp://tts.baidu.com/text2audio?lan=en&ie=UTF-8&pid=101&text=Transfer payment based on factor method is not only the successful experience in the developed countries, but also the requirement for perfecting our transfer payment system.&spd=2, the relevant factors should reflect the differences in regional economic and social development, establishing an open and transparent formula allocating the funds of fiscal transfer payment;(5) Control the population growth of civil servants, especially the institutional personnel numbers;(6) Improving the fiscal decentralization system, making scientific arrangement of fiscal and affair responsibilities among governments of central and local levels.