The issue that local governments rely excessively on the land finance to increase their local fiscal income is very popular and severe, and the problems that caused by the land finance appear more and more apparent and enhancive, which will bring some risks to the stability of society, healthy and sustainable development of the economics.This paper starts with the status in quo and size of land finance of local governments, and by use of the relevant theories of economics and politics, analyze the reasons why the local governments are so wild about the land finance through the economic system, legal system and political system. In the economic system, local governments'role have changed and the responsibility and financial rights is not correlate due to the revenue sharing system; in the legal system, by reason of the imperfectness and unsoundness of the existing laws and codes, it is hard to call to the legal liability of the governments'delinquents, and the phenomenon of lawbreaking due to the public; in the political system, the existing mechanism of checking achievement in official's career has the GDP, economic growth the main checking indices, which makes the local official who seek for the political profit maximization aim mainly at the increasing of fiscal revenue. All above are the inherent motivity and objective environment of systems that causes the land finance. In succession, analyses the risks that brings by the land finance, which including financial risk, fiscal risk, real estate bubbles risk, irregularity and corruption risk, society risk. Based on the above, this paper proposes that through the reform of existing economic, legal and political systems to eliminate or decrease the problems and risks caused by the land finance. |