Research On Local Fiscal Balance Based On The Perception Of Migration

Central government concentrates financial authority and decentralizes governmental duties to increase the proportion of central fiscal revenue to total fiscal revenue and the proportion of fiscal revenue to GDP since the tax sharing reform in 1994.Central government negotiates with local governments from a position of greater strength by increasing the two proportions.Local governments decrease self-owned fiscal revenue and increase self-owned fiscal expenditure because central government concentrates financial authority and decentralizes governmental duties.Self-owned local fiscal revenue cannot meet the needs of self-owned local fiscal expenditure because of budget balancing constraint.Fiscal imbalance will come about.Local governments lack of fiscal autonomy and independence with the addition of policy rigidity,which will enlarge the gap between fiscal revenue and expenditure.The average coefficient of fiscal balance was 0.49 in 2010,which has been falling by 20.4 percent since 1995.The degree of local fiscal self-financing has been decreasing since the tax sharing reform.The quantity of transfer is larger and larger.Transfer cannot fully play an efficient role because of its imperfection.It cannot totally eliminate the gap between fiscal revenue and expenditure.The scale of migrants is getting large by the time.The total amount of migrants is 243 million,and the amount of interprovincial migrants is 94.43 million as 2015 report on China's migrant population development' said by the end of 1st October,2014.The scale of migrants impacts local public finance enormously.Taking population as a production factor,the huge scale of migrants will lead to decrease the GDP of immigratory places.With the amount of GDP falling,the local fiscal revenue will also descend.On the contrary,it will aggrandize local fiscal revenue of migratory places.On the other hand,the migrants will augment local fiscal expenditure of migratory places and descend local fiscal expenditure of immigratory places.In conclusion,migration will impact local fiscal balance.But so far,domestic scholars have paid little attention on the issue and studied not systematically.They mostly focused on study the relationship between migrants and regional development disparity and fiscal expenditure competition to attract migrant inflow.We lack of cognition of the relationship between migration and fiscal imbalance.The dissertation researches systematically of the impact of migration on local fiscal revenue,expenditure and balance.In practical terms,first of all,theoretical analysis of the effect of migration on local fiscal revenue and expenditure is illustrated;secondly,empirical testing the impact respectively,we find that the migrants facilitate the local fiscal revenue of migratory places and significant aggrandize consumptive expenditure;finally,we draw a conclusion that migration will accelerate fiscal balance in one region and exacerbate fiscal imbalance among regions.Horizontal transfer will improve fiscal imbalance among regions to equalize of basic public services.The dissertation is divided into seven chapters.To be concrete,the outline of this dissertation is arranged as follows:Chapter 1 is the introduction,including research background and significance,key definition,the research methods and framework,as well as innovations.Chapter 2 is literature review,concentrating on the effect of migration on local fiscal revenue and expenditure.By reviewing and summarizing the relevant research results lay the foundation for research thought and methods.Chapter 3 is status analysis about migration and local fiscal revenue and expenditure.In recent years,the scale of migrants is increasing.Most of the migrants move from Middle Western regions to East regions and are active labor force.Local governments decrease self-owned fiscal revenue and increase self-owned fiscal expenditure because central government concentrates financial authority and decentralizes governmental duties since the tax sharing reform.Chapter 4 is theoretical analysis about the reaction mechanism of migration to fiscal revenue and expenditure.The migrants will augment migratory places fiscal revenue by accelerating GDP and the price of stock asset growing.Institutional factors and migration factors are the migratory factors that affect the fiscal expenditure.According to previous research,three types of expenditure are classified:productive expenditure,consumptive expenditure and maintained expenditure.Chapter 5 is empirical analysis of migration to fiscal revenue and expenditure.We utilize stochastic frontier production model(SFA)and System generalized method of moments(System GMM)to quantitative analyzes GDP and the price of stock asset.Empirical results show that migrants will accelerate GDP and the price of stock asset growing.Hence,migrants augment migratory places fiscal revenue.We utilize System GMM to test three types of expenditure in the similar way.Empirical results show that migrants only accelerate consumptive expenditure increase.Chapter 6 studies the impact of migration to coefficient of fiscal balance.The chapter researches the relationship between SELFB and net interprovincial migration rate.Generally speaking,there is positive correlation between them.A further study shows that increasing the rate will improve fiscal balance in the migratory places,but worsen fiscal imbalance among regions with linear panel regression analysis.Empirical results of threshold panel model show that positive effect is getting weaker as net interprovincial migration rate increase.Chapter 7 contains conclusions,policy suggestions and research prospect.The innovations of this dissertation are as following:1.Research angle innovation.Migration is the logical starting point.With analyzing the impact of migration on local fiscal revenue and expenditure,migration could be used as policy instrument to promote fiscal balance.With the scale of migrants getting larger and larger,especially the amount of interprovincial migrants has been growing tremendously.The impact of migration on local fiscal revenue and expenditure was studied little.Therefore the dissertation uses the data of population census to empirical test the impact.Empirical results show that increasing the net interprovincial migration rate will promote fiscal balance of migratory places.Migrants could produce more fiscal revenue than expenditure.Horizontal transfer will improve fiscal imbalance among regions,which should be put into use to prevent fiscal imbalance getting worse.2.Research contents innovation.The migrants will augment migratory places fiscal revenue by accelerating GDP and the price of stock asset growing.Previous investigators only studied the effect of GDP ignoring the function of stock asset.With the price of stock asset growing,in particular the soaring housing price generates plenty of local fiscal revenues.Concretely speaking,the influence factors of GDP include 'productive factors' and 'efficiency factors'.Both of these factors can accelerate GDP growing.We especially pay attention to 'efficiency factors'.Empirical results show that net interprovincial migration rate and the technical efficiency has significant positive effect.With the increase of net interprovincial migration rate,the technical efficiency will increase too.'Efficiency factors' will contribute to change the pattern of economic growth.In the part of fiscal expenditure,three type of fiscal expenditure are classified and empirical tested respectively.Empirical results show that migrants only accelerate consumptive expenditure increase.So migrants will augment local fiscal expenditure.3.Research methods innovation.SFA is utilized for research how migration affect GDP growth.SFA that offers a new view of research is an analytical method for study efficiency analysis.SFA can distinguish the influence factors of GDP growth including 'productive factors' and 'efficiency factors'.Both using linear panel regression analysis and threshold panel model analysis show that increasing the rate will improve fiscal balance in the migratory places.That is to say,migrants lead to generate more fiscal revenue than expenditure.A further study shows that the positive effect of fiscal balance is getting weaker as net interprovincial migration rate increase.