A Study On The Influencing Factors And Mechanisms Of Local Government Debt Allocation In China

At present,the debt risk of local governments in China is generally controllable,but the significant differences between regions in debt burden and debt risk are worrying.Under the consideration of debt risk,starting from the low efficiency of local government debt allocation in China,based on the fact that the system fundamentally determines the way of resource allocation,it is reasonable to study the influencing factors and mechanisms of local government debt allocation in China at the institutional level on which local government debt depends.In general,this dissertation constructs an institutional analysis framework,and studies the influencing factors and mechanisms of local government debt allocation under different institutional environments along the path of "equilibrium-disequilibrium-equilibrium" of institutional evolution: with the deepening of China's market economic system reform,in the process of local government debt system change,How does institutional change affect the allocation of government debt;In the investment and financing system environment represented by local financing platform,local government debt and economic growth interact with each other,how does economic growth affect the allocation of local government debt;Under the institutional environment of the central government's strict control of local government debt,local government debt financing is subject to institutional and market constraints,how does the financing constraints affect the allocation of local government debt.Based on this,this dissertation evaluates the current efficiency of local government debt allocation in China,analyzes its impact mechanism on local government debt allocation from three aspects of institutional change,economic growth and financing constraints under the framework of institutional analysis,and puts forward solutions to optimize local government debt allocation in combination with China's actual situation.The main contents and conclusions of this dissertation are as follows:First,it studies the allocation characteristics and efficiency of local government debt in China.It evaluates the current situation of China's local government debt,analyzes the allocation characteristics,selects appropriate evaluation methods,analyzes and evaluates the allocation efficiency,and further clarifies the necessity of studying the allocation of local government debt.The analysis shows that in recent years,the overall efficiency of local government debt allocation in China has declined,and more government debt has been allocated to areas with low return on investment,resulting in regional differences in the debt burden of local governments in China,resulting in regional imbalance of local government debt risk,which is not conducive to the prevention of the overall risk of local government debt for a long time.Second,it studies the influence of institutional changes on the debt allocation of local governments in China.Fundamentally,the system determines the way of resource allocation.From the perspective of China's investment and financing system reform and the formation of government debt,system is the basic condition for the formation of local government debt,and institutional changes have an important impact on the allocation of local government debt in China.Starting from the institutional environment and conditions of the formation of local government debt in China,combined with the process of institutional change of local government debt in China,this paper systematically analyzes the impact of institutional change on the allocation of local government debt in China.The influencing mechanism of institutional change on the local government debt allocation mainly includes 3 aspects: the top-down institutional supply mechanism,the bottom-up institutional demand mechanism and the institutional innovation mechanism under the joint effect of the supply and demand.Through the analysis of a government behavior model under the situation of macroeconomic fluctuations,it shows that the changes in the local government debt system will not only promote economic and social development through the optimization of debt allocation,but also have an impact on the macro-economy due to the dramatic changes in the allocation.Moreover,if the institutional changes can not fully meet the institutional needs of local governments,the institutional changes led by central government can not achieve a stable balance even in the short term.At this time,the local government has the need for institutional innovation,and will inevitably seek new institutional innovation to build a new institutional balance,leading to changes in debt allocation.Third,it studies the influence of economic growth on the debt allocation of local governments in China.Under the local government debt system environment with the local financing platform as the main body,based on the close relationship between the land market and the local government debt in China,this dissertation constructs an economic growth model based on land development investment,and analyzes the formation of local government debt in the operation of the economic system,the role of debt in promoting economic growth and the influencing mechanism of economic growth on local government debt allocation in this process.The results show that the impact of economic growth on the local government debt allocation is not only closely related to the return on investment,but also related to the local government's dependence on the land market: on the one hand,the direction of local government debt allocation is opposite to the return on investment,and the debt allocation in the regions with high return on investment is smaller than that in the regions with low return on investment.In the case of high return on investment,the increase in debt will not increase the debt burden,but will reduce the debt burden and debt allocation.On the other hand,in regions with high dependence on land market financing,when the return on investment is low,their debt allocation will increase.As a result,when the local government debt generally increases,the debt allocation in some regions increases and the debt allocation in some regions decreases.Fourth,it studies the influence of financing constraints on local government debt allocation in China.The essence of the formation of local government debt is the financing behavior caused by the government expenditure exceeding the income.Under the system environment of strict control over local government debts by the central government,the local government debt system shows the characteristics of tight balance,and the local government's financing demand and financing behavior change under the new system constraints and market constraints,thus affecting the debt allocation.In this dissertation,the theory of financing constraints is applied to the analysis of the financing behavior of local governments.Theoretical analysis and empirical research show that the non-homogeneous financing constraints on local governments have an important impact on the local government debt allocation: On the one hand,equity financing constraints have a significant positive impact on local government debt allocation.In areas with insufficient vitality of private economy,the equity financing constraints faced are relatively large,resulting in relatively more debt allocation under the effect of debt replacement mechanism;on the other hand,the policy financing constraints have a significant negative impact on the local government debt allocation.In areas with high pressure on urban construction,the constraints on policy financing are relatively small.Under the effect of adverse selection mechanism,more debts are allocated.Moreover,the non-homogeneous financing constraints on local government debt financing have affected the local government's intervention and the market mechanism,thus leading to the allocation of the reverse rate of return of local government debt.Fifth,it designs the countermeasures to optimize the local government debt allocation.For the optimization of local government debt allocation,we should not only start from the relevant systems of local government debt,but also optimize the system that affects the local government debt allocation,so as to reduce the adverse impact of institutional changes on the debt allocation and macro-economy;We should also start with the economic system on which the local government debt depends,optimize the allocation of government debt according to the law of market operation,reduce the relationship between the land market and the local government debt,and realize the positive interaction between economic growth and government debt;We should also start with the financing constraints that affect the government debt allocation,change the financing constraints faced by local governments,and reduce the negative impact of financing constraints on the debt allocation.From the specific path,the first is to establish an efficient,flexible and predictable government debt system environment through the combination of rule management and flexible governance,and effectively solve the problems such as the inequity of local governments' financial power,the central cover of local debts,and the weak sense of risk;secondly,in view of the natural defects caused by market-oriented allocation and local government led allocation,give full play to the advantages of macro-control and optimize the allocation scheme of local government debt line with reference to the idea of credit allocation;thirdly,optimize the source of funds for regional development,expand the source of social investment channels and PPP models,and change the local government's high dependence on debt;fourth,on the basis of the optimization of the economic efficiency of debt allocation,from the perspective of the optimization of the welfare of debt allocation,the central government will increase the financial support for local government investment,and strengthen the economic mutual assistance between regions,so as to promote long-term economic and social development benefits and regional balanced development.Based on the theory of institutional economics,this dissertation establishes the theoretical framework of local government debt allocation.Based on the reality of institutional change in different stages of China's reform and development,the close relationship between local government debt,land market and economic development,and the financing constraints local government faces as the financing subject,this dissertation studies the influencing mechanisms of local government debt allocation from the perspective of institutional change,economic growth and financing constraints,which expands the existing research field and provides a new research perspective,has certain theoretical significance.The conclusion of this dissertation provides policy reference for the function display,efficiency improvement and risk prevention of local government debt in China,which has certain practical significance.