Research On The Management Of Local Government Debt In China

Local government debt has a positive effect on promoting economic growth and social development.However,once the local government debt is too high to be beared by the local governments,local financial crisis and even regional systemic financial risks would occur.Under this circumstance,the central government has laid more attention on the local government debt risk management,and issued a series of laws and regulations,such as modifying the "budget law" and so on.But according to the author's participation in local government debt management practice and previous research results,there are still problems in the management of local government debt,such as "risk warning paradox",lack of quantitative research on debt influence factors and lack of strong grip on debt.Under the new economic norm,it is necessary to study the formation mechanism,influencing factors,riskand performance evaluation management of the local government debt.Based on the existing literature conclusion,the theory of public goods and choice,the theory of intergenerational equity and the theory of principal agent,this paper analyzes the formation mechanism of local government debt in China;Select the municipal data and the provincial data,the use of panel regression model,this paper empirically studies the factors of local government debt;Based on the current situation of local government debt,this paper analyzes the role of local government debt replacement by using the game theory model;In this paper,we build the index evaluation system and the input output index,through the principal component analysis and the DEA method,to assess the risk and performance of local government debt,and to analyze the correlation between them;Based on the systematic perspective,from the external and internal two angles,this paper puts forward the suggestions of local government debt management.The research contents and main contributions are as follows:This paper summarizes the forming mechanism of local government debt,points out that the financial system factors are the essential reason for the formation of local government debt,investment and financing system and debt management system factors are the cause of the technical aspects of the formation of local government debt,the administrative system factors are dynamical reasons for the formation of local government debt and external economic development factors are catalyst for the formation of local government debt.At the same time,it also analyzes the influence of local government debt on the economy and society from the economic gross,structure,investment,income distribution and financial angle.Based on data released by the national auditing and local government debt,this paper analysis the current situation of the local government debt from the following aspects: the overall scale and change tendency,type and structure,the sources and uses,debt ratio analysis and debt period and structural analysis.Through the grasp of the status quo,to provide guidance for the next research.Using the panel data from 282 cities between 2003 and 2015,this paper empirically analysis the factors of local government debt,and further analysis of the regional differences and "four trillion" investment impact on local government debt.The empirical results show that: the factors of industrialization and urbanization,performance evaluation factors,financial factors have a significant impact on the local government's debt ratio;Through 1995-2013 in the provincial level panel data,using fixed effect model,difference GMM and System GMM model,this article is a multi-layer test and verify the hypothesis: if population outflow ratio is higher,the elderly population dependency ratio is higher and rigidity of fiscal expenditure is higher,and local government debt rate is relatively higher.Through the relevant analysis of the contingent liabilities and influencing factors,the study concluded: the indicators of local government officials' performance evaluation mechanism,urbanization process and other indicators are a significant impact on the contingent liabilities.The local government contingent liabilities problem and its influencing factors are systematically investigated.Quantitative analysis shows that the proportion of debt to debt is high,and the differences among provinces are obvious.The causes of debt include performance evaluation mechanism,industrialization,urbanization,the mismatch between the local government's financial power and powers,and the operation of state-owned collective enterprises.The correlation analysis shows that the influencing factors of contingent liabilities are basically consistent with the previous analysis of the causes of local government contingent liabilities,the prosperity of the real estate industry supports the sustainability of contingent liabilities.Finally,the international contingent liabilities management experience is summarized and compared,and the enlightenment is put forward.This paper develops a comprehensive index system to assess the risk of local government debt,and use the DEA model to evaluate the performance of local government debt.According to the matrix analysis method,the 30 provinces are divided into four categories.For such as Guizhou,Hunan and other regions with debt risk and the performance of the double height,should strengthen the local government debt risk control,At the same time,should increase the size of local government debt;For such as Inner Mongolia,Shaanxi and other regions with higher risk but lower performance,the scale of debt should be controlled,and the monitoring of the use of debt should be strengthened;for such as Shandong,Anhui and other regions with low risk and high performance,should increase the scale of the use of debt to promote economic development and provide social and public services;for such as Beijing,Shanghai and other regions with lower risk but lower performance,should strengthen debt management,improve the performance appraisal system of debt,and improve the performance of the debt.Based on the previous studies,this paper argues that the relationship should be coordinated between economic development and debt management,urbanization and debt management,regional differences and debt management.Based on the systematic point of view,this paper puts forward the goals and ideas of local government debt management,and proposed corresponding suggestions from the local government debt in the external system(debt management system,financial system,investment and financing system,the achievements inspection system)and internal system(planning and approval of debt,debt financing,debt using process monitoring,debt risk prevention).Further research could focus on the following aspects: The first,with the accumulation of data and data quality improvement,using panel regression model,strengthen the analysis of influence factors of the contingent liabilities;The second,to improve the risk and performance evaluation index system of local government debt,according to the annual evaluation results of risk and performance of local government debt,strengthen the correlation analysis between the risk and the performance of local government debt,to explored therisk and performance management problems of local government debt in-depth,to measure and formulate more scientific and rational local government debt management policies.