Transfer Payment And Long-term Economic Growth Of China

Transfer payment is one of questions that the economic educational circles discuss more in recent years. The system of intergovernmental transfer payment in developed countries such as Japan, Canada, Germany has a long history and is relatively perfect. From 1990's reform and design of intergovernmental subsidy system has been one of key points when most developing countries and some countries in transition make their policies. .In our country, because there was no such reasonable plan, the problem is paid high attention to at present.At first, the conception and the original thought of transfer payment is introduced in the paper. It divides transfer payment into 4 levels according to its scope, emphasizes the transfer payment is income transfer from central government to local governments.Secondly, It refers the theory of transfer payment in market economy is on the basis of the theory of local public goods, its inner logic is "market failure-public goods-local public goods-intergovernmental revenue and expenditure division-transfer payment, after that many existence reasons of intergovernmental transfer payment, the design standard of its system and the fund resource. The relevant study on the relationship of intergovernmental transfer payment and economic growth is introduced in this paper as well.Thirdly, after the study it analyses transfer payment in Ramsey - Kass -Koopmans' frame and draws a conclusion that transfer payment has negative effect to the economic growth under the Cobb-Douglas, production functionIn the investigation of transfer payment and the economic growth in China, the concrete situation of transfer payment system is introduced including its basic objects, manage means, system design and the history of the manage system of public finance in our country, at the same time poor provinces depend more on transfer payment is emphasized. Then it refers the transfer payment at present improves fiscal equalization in horizontal fiscal balance, but there is still great difference between areas.Finally, it uses the data of transfer payment since 1994 tax system reform in China, investigates the contribution rate that each key element to the economicgrowth, and the result further shows: most key elements of transfer payment slow down the economic growth, the only exception is tax revenue return, but the way of tax revenue return at present was defined on the basis of keeping localities' vested financial capacity in 1993, the richer the area is ,the more tax revenue returns, and this approves and aggravates the unfair distribution of financial capacity in different area. The conclusion that tax revenue return has positive relativity to the economic growth further proves a viewpoint that the economy of developed areas has efficiency instead that key elements of transfer payment promote the economic growth.