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Analysis On The Mode Of Fiscal Decentralization And Local Government's Activities In China

Posted on:2006-12-01Degree:MasterType:Thesis
Country:ChinaCandidate:H YangFull Text:PDF
GTID:2156360152976181Subject:Public Finance
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Since the foundation of PRC, especially the open policy implemented in 1978, China has achieved notable results with several decentralization reforms in fiscal system. However, with the development of economy and society, the present fiscal system exposes many problems and becomes the bottleneck in further growth. It is imperative to continue the reform.This paper used "constitutional consensus" mode to summarize the characteristics of federalism in U.S.A and the formation of European Union as a super federal while used "executive consensus" mode to describe the fiscal system in feudal China, where the central government monopolizing the provision of public goods and obtain financial revenue through nonstandard fiscal income and expenses. China has five-thousand-year-old political economy history, today's innovation and arrangement in institution still has trace of yesterday's, for the characteristics of Path-Dependence.The paper focused on intra-governmental fiscal division and its mode to analyze the issue through discussing the local government's activities, including explosion of nonstandard fiscal income and expenses, tax competition, corruption, regional separation and repeated construction. Nonstandard does not mean non-budgetary management and non-plan fiscal administration, instead, it refers to accompaniment with non-democracy and non-commonality, showing the autarchy of imperial power, the compromise of central government local ones. Nonstandard financial income and expenses reflect the flexibility of Chinese. The democratic fiscal system did not evolve in the long history of feudal China while informal and nonstandard fiscal system repeated itself. It could be concluded that new public finance and democratic finance should be developed in the market-oriented reform if we want to deal with the relationship between the central and local governments successfully. Chapter 1 is as an introduction and including two sections. Section 1 introduces the background of the issues. Section 2 gives the aim and meaning of the paper. As a part of the economic reform, the decentralization reform is very important to the whole nation.Chapter 2 introduces the development of the fiscal decentralization theory and the achievements of different scholars briefly. Firstly, introduces the theories of Stigler, Tibeout, Oate, Montinola, and Qian. Secondly, gives the achievements about the relationship between the fiscal decentralization reform and activities of the local governments. Thirdly, we can gain the revelations from the first two parts. Democratic finance system is the object of our reforms. Chapter 3 compares the fiscal decentralization modes between federal countries like U.S.A and China, the characteristics of constitutional consensus and executive consensus, and the reasons from the histories in federal countries and China respectively. The characteristics of constitutional consensus include prior provision of public goods by local government in the principle of fiscal assignment, local government having tax rights in the principle of fiscal division, identification the division of the fiscal role by people. These have close relation to the history, culture, geography of the federal countries. In a word, under the collective work of both internal and external pressure, especially in virtue of fundraising through wars, democratic fiscal system was established. On the contrary, China has different situations, the characteristics of executive consensus include strategic, informal, and administrative.Chapter 4 analyses the relationship between the local government's activities and decentralization reform in China. The local government's activities like tax competition, corruption, regional separation, repeated construction and explosion of nonstandard fiscal income and expenses, on the one hand, are encouragements to the local governments, on the other hand, reflect the informal decentralization reforms in China.Chapter 5 is a solution. The main content is how to perfect the fiscal decentrali...
Keywords/Search Tags:Executive Consensus, Fiscal Decentralization, Democratic Finance System
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