Charitable Giving, Government Expenditure And Economic Growth

Social security system, united by nation and society, which is forced to rule by the legislation of a country is a sort of modern social system for taking precautions against and reducing risks. It plays an essential role in the whole society. However, facing generalized risks and complicated social problems, it is not enough for people to depend only on the power of government. In this age of great changes of social structure, no matter we face an eternal puzzle or cope with new challenges, it is an inevitable to make various resources play aggregation function by the allocation of sorts of resources. Consequently, the research of charitable donation which is called“the third distribution”is particularly important. All kinds of charity resources play a unique role in assisting both long-term vulnerable groups and short-run ones. They resonate with social security in many aspects such as facilitating social equity, balance gap of wealth, and mitigating social conflicts. And yet the values in modifying public opinions, leading social style and so on are more inestimable. The dissertation is divided into six sections aiming to discuss charitable donations, government expenditure and economic growth. Specific contents are as follow.Section one is introduction. It mainly introduces the writing background, purpose as well as significance, and defines the basic concepts which are frequently mentioned in the dissertation. In the meantime, a brief introduction is made with regard to the essay’s structural arrangements, innovations complements and research methods. Section two mentions documents. The relationship between government and charitable charity is scheduled according to charity economics. Starting from donators, philanthropic organizations and government, three principal parts of charity economics, reveals the main aspect of charity economics called charity motivation of donators, donative income effect, price effect, crowding out effect, crowding in effect and joint fundraising of philanthropic organizations. They provide the literature foundation for the study of the dissertation.The third section elaborates the motivation, source and direction of the charitable donation respectively. Through sorting out the relevant documents, we find out that, to begin with, the different motivations of charitable donation will lead to different relationship between government expenditure and charity donation. For instance, altruism results in completely extrusion effect, and the coexistence of altruism and ego motivation gives rise to part extrusion effect. In addition, he different sources will produce different scale of crowding out effect. If the main source comes from the government expenditure, the expenditure will exert a relatively stronger crowding out effect on charity donation. However, there will be a relatively lighter crowding out effect on condition that most of the sources come from the personal. What’s more, the different direction will bring about different relationship between government expenditure and charity donation, which can be reflected from the fact that it is crowding out effect in some fields but crowding in effect in other fields. Just because the motivation, source and direction can contribute significantly to the relation between government expenditure and charity donation, the foundation theory of charity donation is explained through the above chosen three points in order to provide theory foundation to later study.The fourth section further compares and analyses the behavior of charity donation between China and the West. Firstly, in terms of the level of donation, compared to the charity donation in European and America, its development in China still stand at a lower level, as a result of the difference in cultural background, society background, economic development level and tax preference policy. Secondly, judging from the distribution structure of main party of donation, opposite to foreign countries, the features in China can be summarized as: the unbalanced structure of donation parties, the major origin collected from corporations and the low level of personally donating. All of these are highly related to inaccurate awareness of charity organization, less preference of charity consumption, poor culture of charity, as well as low level social security. Thirdly, given the structure of the source, the simplification of structure in China, characterized as money and products, differs greatly from the diversification of structure abroad, because Chinese corporations pay no attention to the returns. Last but not the least, provided that the flow direction of charity, the charity in China is featured as emergency and lack of scheme, distinguished from the long term and normalization in foreign countries. In the fifth section, it was made a comparison on interaction between charitable donation and government expenditure. Based on the totally extrusion model, part extrusion model and packed into effect model, analyzing the data under different charity model respectively, it was found that the extrusion between foreign government expenditure and charitable donation is mare than the packed into effect. Even if there is packed into effect, the effect is not obvious. The model shows that different donation mode of government expenditure has a different effect on different income source of charity, but they all played as extrusion. Especially the indirect extrusion relation (government expenditure) led to the ability of fund-raising and expenditure reduced, which can lead to a reduction on private donation. Analyzing the role that government expenditure for charitable donation from the main consideration of the flow of charitable donation, the results show that the government expenditure to different field, it will have a different effect on charitable donation, especially to culture, education, health and social insurance have a prominent packed into effect. As for the effect of private donation on government expenditure, there is a little impact on government spending because of low level of private donation. In a word, private donation had packed into effect on central government expenditure, but for local government, it embodied in extrusion, especially on education, social insurance, and so on. Therefore, in order to promote the development of charitable donation, it will need to make the flow of government expenditure reasonable.In the sixth section, the dissertation analyses the relationship between economic growth and the charitable donation by the means of comparative analysis of solid evidence. We found that in the United States, charitable donations and economic growth have a mutually benign reinforcing. That means charitable donations promotes economic growth, and then economic growth can drive charitable donations in return; while there is no causal relationship between the economic growth and charitable donations in China. This paper has listed two theoretical explanation of this phenomenon——one factor is from the view of driving the economic growth and another is from the relationship between the mainstay of macroeconomics and microeconomics. This paper also offers corresponding policy recommendations to promote the charity development in China. Innovations:Firstly, the thesis analyses the relations of the expense of foreign government and charitable donations from the view of Charity Economics. Divided from the way of manifestation, there are completely extrusion effect, partly extrusion effect and crowding-in-effects.Secondly, the paper not only explores the role of government expenses charitable donation, but also has studied the effects of charitable donations on government expenditure. At the same time, the author use Chinese data to validate his theory, which makes the essay more comprehensive than the study abroad.Thirdly, this article divided the government expenditure in two aspects on the basis of the source of charitable donation and the flow of charitable donations, providing a better basis for government policies. The majority of documents investigate the influence of government expenditures for charitable organizations on private charitable donations, while this article focuses how the government expenditures on the flow of charitable funds could impact the charitable donation. So the essay opened up a new perspective to study the relationship of government expenditure and private charitable donation.Fourth, there are numerous documents about the relationship between government expenditures and charitable donations, but they are only on the theoretical and empirical analysis of their relationship rather than regard as their relationship from the economic development of the whole nation. In two views of government expenditures and charitable donation as well as economic growth and charitable donations, the dissertation analyzes and establishes the indirect relation between charitable donation and economic growth in the way of government expenditure, which makes charitable donation research be of economic characteristics. Meanwhile, in the stage of national economic development, to probe into the relationship between government expenditure and charitable donations can make us realize the significant meaning through charitable donations brought by government expenditure.