| China’s decentralization reform is generally considered a key institutionalarrangement that causes economic growth miracle, but in the theoretical research andEmpirical Analysis on fiscal decentralization, the China agricultural economic growthperformance is not clear. In the institutional framework of fiscal decentralization, basedon local government behavior and empirical study, System analysis of agriculturaleconomic growth performance has significant theoretical and practical value. BecauseChina is a big developing agricultural country with political centralization, economicmoderate decentralization, the focus is on fiscal decentralization system that canencourage local governments and their officials to promote agricultural and ruraldevelopment, and the change of city biased policy design, narrowing the gap betweenurban and rural, promoting agricultural sustainable growth level.The fiscal decentralization, competition, government officials and politicalpromotion theory are introduced to the agricultural economic growth perspective, andtrying to establish theoretical framework of the relationship and effect of fiscaldecentralization, government competition (promotion) and rural public goods,agricultural economic growth. Based on the perspective of fiscal function of resourceallocation, income distribution and economic growth and stability, the study reveals themechanism of fiscal decentralization on the impact of rural public goods supply,agricultural economic growth. Finally the study explores the operation mechanism,implementation mode and regulatory policy of Chinese agriculture and rural economicgrowth of high quality and the integration of urban and rural development.The principal conclusions of this study are as follows:Institutional variable of China’s decentralization has the efficiency difference onthe supply of rural public goods. International decentralization variable is not effectivein promoting rural compulsory education expenditure of local government, but China’sdecentralization variables have significant and robust effect on supplying rural welfaresocial public goods.Transfers from the central government do not effectively promotethe supply of public goods in rural medical. The supply effect of local governmentfinancial self-sufficiency rate is not significant. But the “flypaper effect” is obviousfrom local government to central transfers. Government competition has a negativeincentive effect on rural basic education. Anti-corruption enhances the effectiveness of rural basic education, but reduces the welfare supply, which implies that there are somerent-seeking and corruption opportunities. Urbanization has a significant supply effecton rural basic education, health care and welfare of social public goods.The economicgrowth and new rural construction policy variables are also important factors, whichaffect the supply of rural public goods effect and present the difference.This article provides a system analysis framework of fiscal decentralization,agricultural economic growth and rural-urban income gap in China based on newinstitutional economics. Our study finds that all the variables have significant long-termequilibrium relationship and short-term dynamic adjustment mechanism by VAR&VECM model. Income gap has a reverse self correction mechanism, but the correctionability is poorer. The influence of agricultural economic growth on income gap residentsfluctuated degressive trend. Fiscal decentralization will have a positive impact andaggravate rural-urban income gap in a short-term, however, it will reduce the gap in along-term. This paper has also obtained VAR model forecast. These findings providebeneficial inspiration and public governance strategy.This paper estimates and decomposes the provincial agricultural TFP from1978to2011by DEA-Malmquist productivity index method, and observes carefully thetemporal evolution of difference, regional distribution and group growth efficiency. Ourstudy finds that agricultural TFP growth is mainly determined by the rate oftechnological progress and technical efficiency, but the role of technical efficiency islimited. Agricultural TFP and technological progress index show cyclical changes, andtechnical efficiency index with inverse cycle stages. Agricultural TFP efficiency changeis unbalanced. The difference is significant among provinces. Agricultural technicalefficiency index is generally not high. Agricultural frontier technology progress issatisfied in the Central and Western regions. Growth effect of the main efficiency indexis obvious in municipalities. The main efficiency index is obvious in divergence effect,but the trend of convergence effect and spillover effect is not significant. Besides thefactor input, business model innovation is more important. So agricultural economicgrowth and sustainable development should be the path of the mode of two wheels drivein the future.This paper analyses the influence factors on the efficiency of agriculturalproduction for each index change. The study find that Effects of local governmentbehavior factors is in non-equilibrium, and is significant positive effect on agriculturalTFP, but the impact is negative on the agricultural technical and pure technical efficiency, no significant influence on the agricultural frontier technology progress rateand scale efficiency. The effect is negative of total agricultural output value for theagricultural frontier technology progress, but the promotion is significantly positive ofagricultural technical efficiency and pure technical efficiency, indicating the currentagricultural economic growth is still followed the extensive growth pattern, and formspath dependence. Agricultural human capital has a positive promoting effect.Agricultural production performance is influenced by non-grain crops sown area andnatural disaster significantly. The relationship is significantly positive betweenurbanization and agricultural technical efficiency, pure technical efficiency, scale ofagricultural efficiency. Industrialization for agricultural technology progress rate hassignificant positive effect, but is negative for agricultural scale efficiency. Policyimplication lies in perfecting the top system design and encourages local governmentsupport behavior. Finally the paper points out that Adhering to the integration of urbanand rural, mutual development of Industry and agriculture, and inputting factors ofmodern production and management pattern to the agricultural sector.This paper first constructs China’s decentralization system frame based on newinstitutional economics, and analyzes local government fiscal support for agriculture,rural financial development and production factors on agriculture economy growthperformance variation mechanism. The empirical results show: the growth ofagricultural economy has apparent cumulative hysteresis effect,policy drivensignificantly. The growth effect of fiscal decentralization is obvious and has the crossand regional difference characteristics. Urban and rural financial development is notbalanced and the rural financial function development is restrained, hindered the growthof agricultural economy. The interactive mechanism between rural finance and entityeconomy is not significant. The coordination between fiscal investment in agricultureand rural financial shows significantly growth effect, larger than the simple financialeffectiveness. The relationship has become more closer between macro economicsituation, agricultural energy consumption and agricultural economic growth.The policy recommendations of the study are as follows:First, promote the governance system and management modernization, improve theoperating mechanism of public financial support to agriculture. First of all, thegovernment fiscal behavior basis should be established on the constitutionalism andgovernment by law, gradually changed by the central “decision”,“notice”,“the firstdocument” and other forms, and should adjust by the law of formal specification. Secondly, it should be focus on the inherent stability of decentralization contract andfiscal system, and avoid the low efficiency caused by the frequent changes ofdecentralization and fiscal system. On the one hand, it should change the current fiscal“a level of government, a financial constraint” from “provinces control counties” and“counties control towns” experience, actively and steadily promote financial supportingagriculture into “central-province-county” spending levels, improve operating efficiencyof financial system and the fairness of financial resource allocation. On the other hand,the local government should reform the fiscal agriculture fund allocation andmanagement system, integrate various agriculture department, clear responsibility,innovate agricultural investment management system and operation mechanism, andstrengthen the local people’s Congress, the CPPCC and the Commission for disciplineinspection departments of audit and supervision of agricultural investment funds. Toovercome the deviation of the implementation policy of supporting agriculture infinance of local government, improve the input-output performance. Finally, it shouldenhance scale, optimize structure, form into priority mechanism of the financial supportfor agriculture, and ensure financial input to the needs of departments and fields.Secondly, match the governance and the financial rights, establish fiscal budgetconstraint mechanism. Based on guaranteeing the central macro-control, it shouldreduce the sharing of taxes and the share ratio, moderately reduce the central financialpower, and enhance financial power and resources of local governments, so that theyhave the ability to implement the central government’s “three rural issues” governancearrangements. At the same time, according to the symmetrical principle of financialrights and the governance, it should clear definition of the central government and localgovernment fiscal agricultural expenditure responsibility boundary, also perfect thelocal tax system, giving local governments more rights of issuing bonds. The localgovernment should streamline the administrative structure, reduce the cost of runningthe government, and transform the functions of government. Promoting the rule of lawof budget and standardization, strengthening the legal binding budget, rigidly requiringof the absolute and relative growth rate. Moreover, there should be clear operating bodyand the boundary of responsibility for budget preparation, approval, implementation andsupervision. Change the budget expenditure oriented city deviation, and increase theproject investment in agricultural production elements. Promote the proportion ofagricultural production investment, human capital, technology and rural public serviceinvestment. The hard constraint mechanism of land grant fees should be establishment. The local government’s “grabbing hand” of occupation farmland and crazily selling landshould be strictly regulated. Meanwhile, participatory budget system should beestablished, and the fiscal agriculture fund payments are included in the budget reviewand social supervision.Thirdly, optimize the transfer payment and implement the integration mode ofurban and rural development. The performance of unconditional transfer payment, likeprevious poverty alleviation, should be evaluated by the central government. Overcomelow financial balance, and innovate performance evaluation index system of the centraltransfer. Meanwhile, the transfer of matching conditions or the proportion of paymentshould be implemented. Simplify the transfer payment links and improve the transferefficiency of capital utilization. The central government should establish a transferpayment mechanism of targeting and redistribution, improve the precision and intensityof transfer payment for the backward provinces of rural public goods. Especially for thespillover of rural public goods, the special payment must be established. Moreover,improve the transfer payment system at and below the provincial level, establish unifiedallocation of channels and transparent information release platform. To eliminate themain obstacle to the integration of urban and rural development, first of all to promotethe equalization of urban and rural public products and service supply, improve theefficiency and quality. The urban and rural public goods allocation should be dominatedby the local government. Adhere to the urban and rural fair unified fiscal policy,construction the feedback mechanism of city to rural institution and policy, materialcapital, human capital etc. The last is the innovation of rural land property rights system,Safeguarding farmer’s land value-added income, and exploring channels of propertyincome.Fourthly, factors of production and operation mode of modernization should beinput agriculture department.“Two wheel drive” mode should be the path change of thefuture China agricultural economic growth and sustainable development. Through fiscal,financial and insurance policies, it should reduce threshold of agricultural newtechnologies, promote the progress of agricultural technology diffusion and propagation,and construct technology transfer and interaction mechanism of industrialization,information and agricultural production efficiency. Fully understand the cycle ofagricultural production, strengthen the agricultural infrastructure construction, establishecological, low carbon modern agriculture. On the premise of ensuring food security,accelerate the adjustment of the internal structure and the upgrading of the agricultural industry, improve agricultural insurance mechanism, enhance the ability of agricultureresisting market risk. Improve the incentive and restraint mechanism, promoteappropriate scale operation, vigorously develop the family farm, and cultivate newagricultural management body. At the same time, establishing the integration of urbanand rural employment market, building high quality system of agricultural science andtechnology training and communication, improving the investment and accumulation ofrural human capital by education training ticket issuance and other methods, andestablishing the integration of urban and rural household registration and social securitysystem.Fifthly, promote rural financial deepening and explore stable growth mechanism ofagricultural capital accumulation, profit rate. To eliminate the gap between urban andrural areas of financial deepening, innovate system arrangement of rural financialservices, and expand the service function. According to credit status of agriculturerelated financial institutions, the central bank can gradually relax the interest ratecontrol and realize the greater floating range. Moreover, reasonably position ofcommercial and policy financial institutions market boundary, improve the ruralfinancial ecological environment, expand the function of the rural policy finance,innovate financial products, develop micro finance, and promote urban and ruralfinancial co-ordination.In the effective risk monitoring conditions, it is appropriate toreduce the threshold and the cost of financial services in rural areas, relax the farmersloan tolerance and allow a reasonable extension. The central government can tax cutsand incentives for agricultural enterprises, give the provincial level local governmentsmore autonomy and economic incentive in the field of agriculture, and try to authorizeagricultural big province to issue special bonds of agricultural development. In addition,the local government can attempt to establish professional business and policy creditevaluation, guarantee institutions, and explore the way of mortgage, guarantee andfinancing of rural collective land. Let the leverage of financial capital be exertedadequately and induct household investment, financial, insurance, social capital toinvest in agriculture.Finally, the central government should offer local government incentive systemand policy innovation for agricultural development. Optimize the system of politicalachievements and innovate dynamic mechanism of local government to supportagriculture. The central government should change the simple appraisal system in termsof GDP performance, adhere to the Scientific Outlook on Development, pay attention to the coordinated development of urban and rural areas, and put the performanceindicators of supporting Agriculture into the local government officials assessmentsystem. In addition, reform public governance mode, construct farmer preference andgovernment response mechanism, and innovate the system and mechanism of ruralsocial management. To reduce the transaction cost of rights, the highly organized andprofessional farmers autonomy organization should be established, so that it can allowfarmers access to take part in the whole process of public choice and establish the realsense of “vote with foot”,“vote” mechanism. |
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