A Research On The Relationship Between Public Expenditure And Resident Consumption

Fiscal expending as an important means of China macroeconomic regulations and controls has been a long time, and a large number of public goods and other public services with external effects are borne by the fiscal expending, thus, fiscal expenditure has played an important role in economic growth of China. Especially, in the situations of lack of the effective demand in China and in the circumstances of Chinese economic structural imbalance, scientific exploration the intrinsic relationship between fiscal expending and residents' consuming, in the macro-background of taking a new round of positive fiscal policy, provides a key basis for the optimization structure of government fiscal expending to guide the consumer, to start the domestic demand and promote sustained economic growth. There has been no definite conclusion for the fiscal expenditure on the effect of consumption yet, that the expenditure on the consumption may have a "crowding out effect" or "causing effect". In the time of 1960s, the western economists generally believe that public services provided by government have a degree of substitution effects on the ones by the private sectors; consequently, Barro took this view in the research on the output effects of government expending, as well as the Kormendi and Aschauer took use of the time series to analyze and the result also verified the relationship between these two ones. However, by the time of 1990s, some western economists re-set the measurement inspection method, and the results obtained in most countries, government expending and resident consuming existed the complementary effects or had no any effects. Many well-known scholars in China also had research on the issue in the earlier time; Li Guangzhong, Pan Bin and some other people tested the time series data with after the reform and opening up, and found that the government expending and resident consuming existed the complementary effect. This paper tries to explain that a country's fiscal expending effects on the impact of resident consuming are not static, and different financial expenditure has different effects on the resident consumption, which may be either the substitution effects or the complementary effects; as well as under of the different history time and different economic environment, the degree of these effects may be changing. There are lots of reasons for different fiscal expenditures result in different effects on resident consumption: the fiscal expenditures for construction of public gyms, public libraries and other kinds of convenient services, and at this time, government's these expenditures will directly replace the residents' consumption in these aspects, so these fiscal expending on these aspects of resident consumption will have a significant substitution effects; some fiscal expenditures, such as the government in public transportation, tourism industry, and sports industry expending, create a better travel and living environment, which will bring the relevant aspects of resident consumption and stimulation consuming demand, such as the Olympic economy, the World Expo economy and so on. Based on the above analysis, we can see that in the study the effect of fiscal expending on the resident consuming, we should not only analyze the relationship of these from the total size but we also should analyze the potential impact on resident consumption in all aspects of the structure of fiscal expenditureWith the expansion of global financial crisis and the impact on the real economy, since September 2008, our country economy gradually decline and fiscal revenue growth has gradually slowed, and even happened the negative growth, therefore, our country launched a new round of positive fiscal policy. A new round of positive fiscal policy is facing from the structure transition to lower economic growth over-reliance on the government investment, to improve residents'livelihood, to improve the contribution of consumption, and to restore the economy growth mechanism of the dual task of self. Since the global economy crisis, on the one hand due to the economy growth slowdown and business efficiency declining, the sources of fiscal revenue are fewer; on the other hand the government carried out the structural tax cut policy, because the economy downturn and structural tax cut policy led to negative growth of fiscal revenue, and positive fiscal policy has resulted in huge growth in fiscal expending, and that the contradiction of fiscal revenue and expenditure have become increasingly prominent. So under the circumstances of the massive increase in government infrastructure investment and reduce fiscal revenue to improve the residents'livelihood, these ones that how to resolve the contradiction of revenue and expenditure, how to effective implementation the new round of positive policy become the focus of this paper.Through the 1997-2006 the provincial panel data of China, this paper empirical study that how to realize the start of consumer demand and achieve the aim of economic self-growth, with optimization the fiscal expenditure structure under the background of the positive fiscal policy. The study found the basement constructions and administrative expenses in the fiscal expending will have the obvious "crowding out effect" on resident consumption, welfare expending have significant stimulation effects on the resident consuming, and in urban the effects of driving the consumer spending was stronger than ones in rural, these conclusions provide the theoretical basis for the next construction of financial livelihood in China.