Study On Spatial Spillover And Heterogeneity Of Local Fiscal Expenditure

Since China began the tax-sharing reforms in 1994,under the system of political centralization and economic decentralization,the political and economic structure has in fact become a unique quasi-federal system.The system has given local governments more autonomy,unleashed local economic vitality,intensified competition among local governments,stimulated institutional innovation in various economic management systems,and boosted China’s economic growth.Fiscal expenditure competition is one of the most important government competitions.Tax competition to increase local revenue,free-riding behavior and local officials compete for promotion,when making fical expenditure decisions,local governments usually consider the corresponding fiscal decision-making situation in neighboring jurisdictions.The fiscal decision-making in neighboring jurisdictions is an important variable in the fiscal expenditure decision-making function of the jurisdiction.The traditional theories of tax competition and benchmarking competition which consider the influence of neighboring jurisdictions on decision-making in their own jurisdiction,just from the economic theory of the logical deduction.Classical econometric theoies treat such spatial dependence as a disturbance to models by avoiding and reducing the effect.Spatial econometric not only make full use of the spatial information,through the spatial spillover,government competition models from the perspective of empirical analysis methods,such as a quantitative measure of fiscal expenditure interaction between jurisdictions and its strength,help to improve the government public expenditure space situation decision efficiency,reasonable configuration and the spatial layout of the fiscal expenditure policy to provide certain reference.The core issue of this paper is the efficiency of local public goods supply in the context of decentralized fiscal system.Is it that all decentralized supply of public goods with different externalities is efficient? This paper uses spatial analysis methods to select public products with typical positive external and negative externalities through literature combing and practical observation experience,and examines the spatial policy interaction behavior of local governments to judge the local supply of public products with different external attributes.effectiveness.The main role of the spatial econometric model based on the theory of fiscal interaction is to judge whether the spatial spillover effect exists and whether the government strategy interaction behavior is complementary or alternative,but only the average value is provided when measuring the spatial spillover intensity.Therefore,it is necessary to further open the “black box” of the mean values through the spatial heterogeneity model,and quantitatively analyze the specific spatial fiscal behavior of each local government,thus providing a possible empirical analysis basis for formulating policies.The purpose of this paper is not to conduct a complete and systematic test of the fiscal expenditure behaviors of different levels of government.The main purpose is to select typical cases for analysis through literature review and actual observation,indicating that the supply of public goods with different externalities should adopt different methods.The article is divided into seven chapters.The first chapter is the introduction,explaining the background,research significance and research value of the thesis.A brief literature review and evaluation of the application of the spatial measurement method in the theory of fiscal interaction was carried out.The literature review in this section does not cover all of the literature used in this article.Important literature covering the following sections will be cited and reviewed in the relevant sections.The second chapter introduces the institutional background of local government competition and the distribution of fiscal revenues and expenditures of governments at all levels in this context.First,a summary of the development logic of fiscal federalism.Second,a brief analysis of the fiscal revenue and expenditure of all levels of government under the fiscal decentralization system.Through the history of the fiscal revenue and expenditure distribution of the central government and the provincial government,the data shows that the local government in China has undertaken more than 85% of the fiscal expenditure responsibility.Therefore,the focus of the rational allocation of China’s fiscal expenditure is on local fiscal expenditure.In addition,by constructing the provincial government general budget fiscal expenditure structure similarity index to measure the similarity of the financial structure of 31 provincial governments in China,the results show that although China’s fiscal revenue and expenditure show a large gap in the provinces,the financial expenditure structure is highly similar.This also brings inspiration for the subsequent analysis of the spatial effects of local fiscal expenditures,that is,if the spatial analysis is carried out in proportion to the total expenditure of a certain fiscal expenditure,the spatial correlation may be overestimated,so the per capita indicators are used in subsequent chapters.The analysis of the allocation of fiscal revenue and expenditure of local governments below the provincial level is based on the most developed Guangdong province in China.The fiscal revenue and expenditure data of 2007 and 2016 are selected in detail for the fiscal level of the provincial government.The distribution of fiscal revenue and expenditure is examined.The results show that the degree of fiscal decentralization below the provincial level is higher than that between the central and provincial levels,and the role of district and county governments is strengthened,while the township level is weakening.The third chapter introduces the basic theory of spatial analysis.The first section in this chapter introduces the common types,advantages and disadvantages of spatial weight matrix as a reflection of spatial structure.The fifth section introduces the theoretical basis of the financial application of the spatial econometric model.In the sixth section,the difference between the per capita fiscal revenue and expenditure of 31 provincial and 280 prefecture-level local governments was investigated by using the Theil index,and the results showed that the income difference was greater than the expenditure difference.The spatial weights are introduced into the Gini coefficient,and the spatial Gini coefficient is used to investigate the spatial difference of the regional fiscal revenue and expenditure.The results show that the fiscal expenditure difference presents a certain spatial effect.The fourth chapter selects the medical expenditures that are generally considered to have positive externalities.The dynamic spatial panel model is used to examine the spatial dependence of local governments.The results show that the provincial health expenditures indeedly have positive spatial dependence,local government spatial interaction behavior mainly manifests as complementary strategies.Increasing health care spending in neighboring provinces can benefit the residents of the province,and the provincial government will increase investment in health care spending.Then the panel spatial quantile regression model is used to analyze the spatial dependence of spatial dependence at different quantile levels.The results show that the spatial dependence of different quantile levels is different.The fifth chapter takes “public bads” as an example,which is generally considered to have spatial negative externalities.The 28 cities of the Beijing-Tianjin-Hebei atmospheric pollution channel with serious smog pollution are used as research samples to test the environmental protection of urban government to control smog.Using the above samples to analyze the spatial interaction effect of urban government on environmental protection expenditures for controlling haze.The results show that the impact of PM2.5 concentration on urban environmental protection expenditure is not significant.The local governments of the area had not significantly increased environmental protection expenditures due to increasing air pollution.DSDM show that local governments had a tendency to reduce the next period of environmental expenditures.At the same time,environmental expenditure spatial strategy behaviors are spatially complementary.If neighboring cities reduce environmental expenditures,the government also reduces environmental protection expenditures.The area may be caught in the dilemma of race-to-bottom.The spatial heterogeneity analysis showed that there were differences in PM2.5 between cities.The increase of PM2.5 concentration in some cities had a positive impact on environmental protection expenditure.The sixth chapter use the spSUR model to simultaneously investigate the spatial dependence of the four fiscal expenditures of the county-level government.The selected sample is 110 counties of the Guangxi.The advantage of the spatially uncorrelated regression model relative to the model regression is that it can capture the common impacts of the model disturbance term and improve the estimation accuracy of the model.The results show that there is a strategic substitution effect on total fiscal expenditure,reflecting the competition effect of local governments,while public safety,education and health expenditure have strategic complementary effects.Then use MGWR-SAR to test the heterogeneity of relevant fiscal expenditures.The seventh chapter summarizes the article and prospects for the next step.Through the case studies in the previous chapters,it is shown that not all public goods can achieve optimal supply efficiency under the decentralized system.Public goods with negative externalities have problems with supply inefficiencies.The inefficiency of decentralized supply of such public goods does not necessarily need to be through centralized supply,and regional collaborative governance is one of feasible governance strategies.