Research On China's Fiscal Expenditure Structure And Economic Growth

By which government plays its role, the fis(?)al expenditure is required in the construction of harmonious society to maintain reasonable scale and structure, which influences the economic growth remarkably with different contributions of various items in it. In China, with the market reform and government function transformation, some adjustments are required in the fiscal expenditure structure for a sound and rapid economic development, which holds an important position in both fiscal theory and practice and fiscal reform at present.In China's reform and open-up, the economic operation mode is changing from the long-term planned to market-oriented, with weakening economic administration, strengthening public administration, narrowing scope of fiscal expenditure, government quitting micro-market and the field of circulating fund supply and attaching importance to public administration and macroeconomic control, as the results of enhanced market degree and changed national regulation range. At present, despite the increasing total amount, the imperfect administration and structure of fiscal expenditure are far from adapting to the development of socialism market economy. In 1998, China's government began to form a socialism market-adapted and Chinese-featured public finance system and carried out the reform for finance system. Since 2003, China's government has gradually changed its finance policy from Active to Steady, attracting wide attention.In large quantities of academic works on China's fiscal expenditure scale and structure with a few specifically on fiscal expenditure structure's effect on economic growth, in which exists a lot of disagreements, this paper tries to study the relation between China's fiscal expenditure structure and economic growth in the process of fiscal reform empirically to supply policy suggestions for a better fiscal expenditure structure.This paper consists of four chapters. Chapter One is Introduction, elaborating the aim and significance of this research and theoretical and empirical achievements on fiscal expenditure structure and economic growth in and out of China. Chapter Two analyses the relation between economic growth and fiscal expenditure as well as between the fiscal expenditure structure and economic growth, elaborates fiscal policy under endogenous growth theory and gives a theoretical model on fiscal expenditure structure and economic growth. Chapter Three makes quantitative analysis on China's fiscal expenditure structure and economic growth with related data (1978-2006) after an analysis of China's general situation in this field. According to the result of this analysis, in China's fiscal expenditure structure, economic construction, culture and education and others sectors are correlated with GDP positively while administrative and defense sectors are negatively correlated. Chapter Four gives suggestions for China's fiscal expenditure structure on the basis of the results of theoretical and empirical analysis upon.