The Study Of China’s Public Budget Decision-Making Mechanism

In modern society, any family, enterprise or government cannot survive without the flow of money and plan on the collection and distribution of revenue. Government budget, the core of fiscal management, is the plan of revenue and expenditure for government prepared by governments at all levels to illustrate and plan the collection and use of public findings. Government budget emerges and develops with the modern legal system and democratic politics. Therefore, government budget means more than an economic concept. Every annual government budget reflects not only the government’s annual economic plan but also political factors. Government budget is believed to be a tool of the government to regulate the interests of different social groups which involve major political, economic, social and administrative sectors and embody government functions and social policies.The 18th CPC National Congress raised that public finance is the foundation and key pillar of state governance, and it is important to improve legislation, identify authorities of office, reform tax system, stabilize tax bearing, enhance budget transparency, improve efficiency, develop modern fiscal system, and implement comprehensive, standardized, open and transparent budget system. This is a clear instruction for future development of budget management at all levels of government in China. Simon, famous modern management expert, said that "management is decision-making". Decision making is the first link of management and runs through management. Therefore, as a key part of budget management, how to improve decision making mechanism for public budget is the most urgent task.This dissertation focuses on the comprehensive and deepened reform of fiscal management which aims at enhancing the efficiency of public resources allocation and safeguarding social justice. Guided by the Marxism, Mao Zedong Thoughts, as well as theories on modern public finance, public selection, new public management, scientific decision-making and public governance, this dissertation conducts systemic and profound researches on the public budget decision-making mechanism in China through combining theory with practice, history and reality, domestic and overseas situations, general analysis and case study, expounds the history, status quo, problems of the public budget decision-making mechanism in China, analyzes the public budget decision-making mechanism of Beijing Municipality as a typical case, and overviews the establishment and operation of the public budget decision-making mechanism in several developed countries.Chapter 1-introduction- sets forth the background and purposes of the research, and raises the point that, research on the decision making mechanism for public budget can help facilitate socialist market economy system development, accelerate transformation of government functions, develop system of public finance management theory with Chinese characteristics, and improve efficiency of public resource allocation. The research will focus on theory of public budget decision-making, methodologies of decision-making, and decision makers’ behaviors. It summarizes way of thinking, framework setting, innovations and shortcomings.Chapter 2 is on theoretic dialysis of public budget decision making. This chapter raises four characteristics of public budget decision making:public, political, rule of law, and openness, based on three conceptual levels:research on decision, on public decision, and on public budget decision. The chapter also summarizes four roles of public budget decision:to realize reasonable allocation of public resources, improve government’s macro control ability, enhance public governance, and facilitate development of democratic politics. The author believes that, political regime, cultural background, public awareness, economic and social status, and technological conditions are factors that impact budget decision effects. The article generalizes theories of public finance, public choices, new public management, scientific decision, and public governance, to provide theoretical bases for research of China’s public budget decision mechanism.Chapter 3 dwells on practices of China’s practices on public budget decision making mechanism. It is based on related theories, to review the history and current status of China’s public budget decision making, from legal system, functions and powers, decision methodologies, decision procedure, and transparency of decisions, and also analyzes the problems encountered. The author believes that the reason behind the problems is weak awareness of administration by law, ambiguous government liabilities, complex and changeable external circumstances and reform not in place. All this provides foundation for analysis of reform and innovation of China’s public budget decision mechanism.Chapter 4 is about case study of public budget decision mechanism in Beijing city, to analyze a typical case, like dissect a "sparrow". Looking at budget decision system in Beijing, allocation of powers on budget by NPC, government budget decision methodologies, democratic and transparent budget decision and binding forces of budget decision, the research is on the composition, operation and effects of public budget decision mechanism in Beijing. It raises the problems facing this mechanism in Beijing, evaluates the reform and innovation dynamics in this mechanism of Beijing, so as to provide a way of thinking to the country.Chapter 5 is on experiences of public budget decision mechanism of developed countries. It chooses the U.S., Germany, and Japan, etc, analyzes in-depth their history of public budget decision mechanism, current status and growing trends, and make objective evaluation, puts forward enlightenments to China, so as to use "stones from other hills" to consolidate our system.Chapter 6 is about policy recommendations for improving China’s public budget management system. Based on theory study, general study, and case study, as well as China’s actual conditions of economic and social development, the author stresses the urgency of improving China’s public budget decision-making mechanism, puts forward general thinking for next steps, including:following four principles of rule of law, being practical and realistic, focusing on performance, and overall planning and coordination; improving routes for public budget decision-making mechanism, which need to implement budget law in all rounds, ensure rule of law, consolidate power allocation mechanism for public budget decision-making, improve budget decision methodologies as well as budget performance management, improve management procedures, and strengthen budget decision supervision system. Meanwhile, it is also important to enhance leadership, establish professional budget inspection team with high level of expertise, strengthen policy publicity and policy research, further develop e-government, so as to provide strong support to the development of public budget decision mechanism.Following the ideology and methodology of dialectical materialism, this dissertation outperforms innovations of its peer studies both academically and applicability. In terms of the content, the author starts from the budget management decision-making, the logical starting point of public budget management, breaks through limitations of more macro studies but less detailed research, deepens and expands the content, and enhances the integrity and comprehensiveness of the existing public budget management study. In terms of the study perspective, the dissertation breaks the mindset of fiscal theoretical framework, carries out multi-dimensional analysis on public budget decision-making mechanism from the perspective of relationship between the People’s Congress and the government, among government agencies, and between theoretical research and case studies, and further expands the space for public budget management study. In terms of the study conclusions, the dissertation proposes to adhere to and uphold the multi-party cooperation under the leadership of the Communist Party of China, define the roles of National People’s Congress, the Chinese People’s Political Consultative Conference, the public and government agencies in budget making and the ways for budget making, and puts forward the policy advocates of setting up a multilayer and multimode public budget decision-making framework, in which budget preparation, execution and supervision, checks and balances complement with each other.Despite the utmost efforts put in the study, due to various limitations and insufficient knowledge and vision of the author, shortcomings can still be found in this dissertation. First given both theory and practice, the budget concept, lack of authority, clear the scope of decision, this paper can be limited reference information, this article is not well in the aspect of theory. And second the research on fiscal management and relevant theories is not profound enough. In particular, in the current economic and political management system, how to link experience of advanced western countries with China’s reform in public budget decision-making mechanism needs to be further explored. The third, the policy advocates and measures for checks and balances among related parties to budget preparation, execution and supervision need to be further analyzed, so as to develop a scientific, standardized, efficient and prudent public budget management system and enhance decision-making process of public finance management.