| Public debt is the basic way and means for the government to implement fiscal policy.It is of great significance to play a good role of public debt and control the risk of public debt for promoting the transformation of high-quality economic development.Since the global financial crisis in 2008,the expansion of public debt has become a common phenomenon in the development and transformation process of all countries in the world,including China.In recent years,the scale of China's public debt has shown a rapid growth trend.In 2016,the overall national debt scale reached 27.33 trillion yuan,with a debt ratio of 36.72%.For the first time in 2008,the scale of local government debt surpassed that of the central government,reaching18.3862 trillion yuan by 2018(1).What impact will unprecedented large-scale public debt have on economic and social development? Will it promote economic recovery and transformation as expected? What are the risks of such large-scale public debt and in what areas? Although these problems have been systematically studied and concerned since the beginning of classical economists,there are great differences in the forms and transmission mechanisms of public debts under different historical conditions and different types of public debts.To explore the impact of public debts in depth,we should not only explore the general theory from the traditional theory of public debt effect.The mechanism should be further analyzed in combination with institutional environment of public debt.Due to the transition nature of China's economy and society,public sector debt has a profound impact on different fields such as finance,land and income distribution.These problems are intertwined.Risks have shown a trend of increasing and diversification.Risk has gradually evolved from scale risk to extension risk.Risk generation,evolution and transmission are closely related to the expansion of public debt scale and its effects.The existence of these problems makes the impact of public debt on the same scale more widespread than that of other countries(regions).To clarify the formation mechanism behind this complexity and to assess the economic and social impact of debt expansion is of great benefit to formulate more comprehensive and accurate public intervention policies.In China,compared with the central government debt,the formation mechanism and influence of local government debt have many characteristics: the formation of local government debt has the characteristics of both initiative and helplessness,and is quite different from the traditional operation mode of government debt in terms of raising,using and repayment;the space-time dimension of local government debt has the characteristics of strategic interaction and decentralization.Under the system,there are obvious spatial links between local governments in debt behavior,and there is a significant spatial competition relationship in the evolution of debt scale,which makes the debt risk expand.At the same time,the external effects are far-reaching and wide-ranging,manifested in the impact on the welfare of enterprises and family sectors,and have both macro and micro effects,economic effects and social welfare effects.These problems not only reflect the characteristics of local government debt,but also become the premise and foundation of deep excavation of public debt and local government behavior.The risk of public debt largely stems from the scope,nature and degree of its effect.The existing research mainly evaluates the effect of public debt from the perspectives of economic growth and fiscal sustainability,analyses debt risk from the perspective of debt scale and management,and separates the relationship and transformation between debt effect and debt risk.Neither can we analyze the effect of local government debt extensively nor understand the "source" and "connotation" of debt risk in depth,which makes the governance of debt risk fall into the predicament of "A headache cures a headache".Based on this,this paper attempts to understand the risk "connotation" of local government debt from a broader perspective of debt effect.Specifically,this paper combs and summarizes the theory of economic and social welfare effect of public debt in theory,puts forward and analyses the theoretical mechanism of local government debt effect.Based on the characteristic facts of local government debt in China,this paper analyzes the expansion mechanism of local government debt from the perspective of spatial competition effect,and identifies and evaluates the economic and social welfare effect of local government debt from the perspective of microeconomic effect and distribution effect.Based on the inherent logic and external manifestation of the evolution of local government debt risk,and the negative impact of local government debt on economic and social development,this paper puts forward a new concept of debt risk and governance path.Guided by the technical line of "institutional background(characteristic facts)-theoretical research(effect mechanism)-empirical Research(effect evaluation)-countermeasure research(risk management)",this paper conducts a comprehensive study from the following aspects by using a variety of research methods:First,systematically discuss the characteristics,formation mechanism and risk effect mechanism of local government debt risk.The debt scale of local governments in China shows an obvious expansion trend,and the debt risk also spreads from the traditional financial sector to the enterprise sector and social sector.Therefore,it is necessary to understand and grasp the logic and mechanism of debt scale expansion and risk evolution in a deep level.On the one hand,the expansion of debt scale shows obvious "spatio-temporal characteristics".Under the decentralization system,local government debt shows increasingly obvious "competitive relationship",making debt risk "spatio-temporal" contagious.On the other hand,the risk of debt will be further accompanied by the impact of local government debt on the financial sector,the enterprise sector and the household sector,showing a "radioactive" characteristics,generating new risks.These features and mechanisms need to be further tested empirically.Secondly,it identifies the spatial competition effect of local government debt from the perspective of risk expansion.As an important part of financial competition,debt competition has its specific generating logic.This paper elaborates the formation mechanism of local government debt competition from spillover mechanism,comparison mechanism and scale mechanism.Based on the debt data of municipal and county local governments from 2011 to 2014,a variety of spatial measurement models are used to identify and evaluate the debt competition among local governments in China.Empirical research results show that there is a significant positive spatial competition in debt ratio and per capita debt between county-level governments and prefectural-level municipalities in China.Debt competition among local governments is mainly driven by the comparative effect and spillover effect,and the scale competition can not be ignored.The degree of debt competition among county-level governments is obviously higher than that of municipal-level debt competition and provincial-level debt competition.The more basic local governments are,the stronger the debt competition is;the competition of local governments' debt is not mainly caused by the competition of expenditure and income;active debt competition may be the dominant factor;the intensity of local governments' debt competition is obviously greater than that of expenditure competition and income competition;the degree of competition within provinces is significantly higher than that outside provinces,and the degree of debt competition in central and western regions is more obvious.Local government debt competition shows an increasing trend year by year,especially need to be vigilant.This paper provides a temporal and spatial perspective for explaining the expansion of local government debt.Thirdly,identify the micro-economic effects of local government debt from the perspective of corporate financing and investment.Against the background of the rising leverage ratio and the decline of private investment in China,it is of great theoretical value and practical significance to explore the impact of local government debt on the development of enterprises,and it also provides an opportunity to observe the relationship between government and enterprises.Taking private listed companies as samples,this paper provides the internal mechanism and empirical evidence of the impact of local government debt on enterprise financing,investment and development.Because of the crowding-out effect,the high debt ratio of local governments has become an important factor affecting the financing constraints of enterprises.As a strategic behavior of enterprises,debt financing and equity financing show a reciprocal relationship,which brings about a significant increase in the financing cost of enterprises,especially the cost of debt capital.In terms of investment behavior,the rising debt ratio of local governments makes private enterprises invest.The scale of capital has declined significantly and reduced the investment opportunities of enterprises(Tobin'Q value has declined);private enterprises,weak government-enterprise affiliated enterprises and enterprises in areas with low degree of marketization and low degree of legal environment are more affected by local government debts,the financing constraints are tightening and investment opportunities are declining more obviously,while enterprises in PPP incentive industries are relatively less affected.The county-level government debt in the overall debt level has the greatest impact on the financing and investment behavior of enterprises;furthermore,from the perspective of enterprise development,the increase of local government leverage rate will aggravate the financial and operational risks of private enterprises in the region,and the performance of enterprises will be adversely affected.From the perspective of local government debt,this paper provides an explanation for the difficulty of enterprise financing and the weakness of private investment.Local governments may bring adverse consequences to the development of enterprises,especially private enterprises,while boosting the economy by leveraging.Fourthly,this paper evaluates the distribution effect of local government debt from the perspective of income gap.The continuous expansion of the scale of local government debt makes the scope of debt risk and effect gradually infiltrate into the social field from the economic field.While public debt affects the cost and benefit of factor resources,it also affects the income distribution relationship among different factor resources,different regions and different groups through the "cost-benefit" mismatch mechanism.This influence is related to debt financing and so on.It is related to the repayment mechanism.Based on the panel data of prefecture-level cities and CGSS(2010)cross-sectional data,this paper examines the impact of local government debt on residents' income gap,transmission mechanism and heterogeneity from macro and micro perspectives by using system GMM,instrumental variable method and mediation effect model method.The empirical results show that the excessive scale of local government debt has a significant impact on the income gap between urban and rural residents,and mainly comes from the operating income gap and wage income gap,which is closely related to the biased production and bank lending attributes of local government debt;from the transmission mechanism,when raising local government debt,it depends on loans and debt funds.Emphasis on municipal construction and indirect tax are the main sources of debt repayment funds,which will affect the income redistribution effect of local government debt.Marketization alleviates its negative impact on income gap by reducing the cost of debt financing.An unbiased debt expenditure structure helps to broaden the beneficiaries of local government debt.A stable and equivalent source of debt repayment helps to weaken the distorted effect of debt repayment distribution.Fifth,it summarizes and demonstrates the "new risk concept" and the path of risk management and performance improvement in local government debt management.Debt scale expansion has the characteristics of self-proliferation and spillover expansion.On the surface,debt risk is a scale risk,but in fact it is a concrete manifestation of the overall financial risk,especially the financial system risk.At the same time,debt risk is further manifested and evolved into financial risk,enterprise risk and social risk.Therefore,when dealing with the debt risk of local governments,we should not only diagnose the financial system risk,avoid the risk of enlarging the debt scale of local governments from the perspective of coordination of intergovernmental relations,transfer payments and budget constraints,but also base on the path of contagion of debt risk evolution,from the operation mechanism of debt management,cooperation mechanism between government and social capital,market mechanism and contract.In terms of mechanism and emergency disposal mechanism,we should prevent and resolve debt risk from evolving into market economy risk and social risk.In addition,we need to further standardize debt management,optimize debt expenditure structure,strengthen debt incentives and constraints,and build debt performance evaluation system to improve local government debt performance.Generally speaking,the marginal contribution of this paper lies in the following three dimensions: spatial competition effect,economic effect and social welfare effect,which are selected from the perspective and content of the research.The mechanism,path,nature and degree of the local government debt effect are expounded,identified and evaluated.The research perspective of this paper is a new expansion and broadening based on the existing research,which provides a new perspective and new evidence for the logic and effect mechanism of local government debt evolution.The policy enlightenment has certain applicability,systematicness and foresight.Adhere to the logic deduction,based on the analysis framework,perspective and conclusions of the full text,derive the new ideas and contents of debt governance of local governments in China.Specific policy suggestions are put forward from the aspects of debt operation process,debt allocation structure,debt incentives and constraints and debt performance management. |
PDF Full Text Request