Research On Vertical And Horizontal Equilibrium Issue Of Local Government Fiscal Capacity

Public finance, especial local pubic finance is an utmost problem in real economic life. With reform of fiscal decentralization and democratization cannot be changed today, status, power and function of local pubic finance are upgrading and magnifying in different degree in decentralization system. China is in the historic stage which economic system is changing from high plan economy to market economy and economic developing pattern from extensive pattern to intensive pattern. All levels of local government and pubic finance of china is under the condition of the decentralization system which is characterized with tax-sharing have been established elementarily and perfected gradually. Function of resource allocation of local government and finance under the pubic finance framework is heavy gradually, but financial capacity is embarrassed, moreover, central government centralizes financial capacity. So it is necessary to study local financial capacity seriously in order to find sticking point which local governmental executive power did not accord with financial power so many years. It has been the utmost hard and heavy task for local public finance to raise money efficiently to satisfy the increasing expenditure demand and perform responsibility of providing pubic goods. In a sense, deepening study of local financial capacity have magnificent theoretic and realistic significance, whether to realize transform of local fiscal function step by step, or to normalize the inter-government fiscal relations. At first, the thesis bases on target of efficiency and equality, which is the criterion to deal with the relations between governments. Then it takes local financial capacity as theme of study, adopting comparative and positive economic analysis method and so on. With respect to connotation of local government fiscal capacity, the orientation of financial distribution in different fiscal system and analyses in vertical and horizontal equilibrium, the thesis further opens up real condition and the system root of local fiscal capacity and put forward Choice of reform target, measures and system assurance of deepening reform finally. There are six chapters in this dissertation; a brief introduction of each chapter is as follows:Chapter one concludes the connotation of fiscal capacity basing on analyzing and commenting various points and point out that local fiscal capacity is local public finance to raise money efficiently to satisfy the increasing pubic expenditure demand and to perform responsibility of providing pubic goods. Fiscal budgetary system lies in the core position, as the institutional arrangement dealing with fiscal relations between central and local governments as well as local governments at all level, among the factors influencing local fiscal capacity. To large extent, the relations of centralization and decentralization stipulated by fiscal system will determine the revenue and expenditure of local pubic finance, moreover, will influence local fiscal capacity.Chapter two inspect synthetically on the relations of financial distribution in different fiscal system in vertical and horizontal direction. Through the analysis in orientation of efficiency and equalization of financial capacity in highly centralized model, stratified responsibility model and tax-separating fiscal system, the chapter outlined the completed prospect of local pubic fiscal capacity in china with changing of the centralization and decentralization.To further probe into china's local fiscal capacity, the following two chapter of the paper deepen comparative analysis in vertical and horizontal direction. The third chapter deepen the analysis in china's local fiscal capacity at all level after reforming and opening up since 1978, basing on absorbing the experiences and lessons from the ten countries including typical federal countries and national-states in dealing with the fiscal relations between central and local government and summarize that china must gradually decentralize so as to enhance local fiscal capaci...