Research On The Village-Finance-Supervised-by-County Reform From The Perspective Of Institution Innovation

This paper studies the village-finance-supervised-by-county reform that has been implemented all over the country, as another institutional innovation of village and town finance system, on account of the political and economical attribute of finance. It analyzes the reason, process and content of this institutional innovation based on the theory of institution innovation and transformation, and appraises the effects of the reform. It also probes into how to improve and innovate the system with deeper understanding of the reform from the angle of the interactive relations between finance and politics.The author argues that although the advancement of"free-to-tax"reform and reduction of agriculture tax have effectively alleviated the burden of peasants, the village and town finance dilemma have been worsened. To consolidate the"free-to-tax"reform and build a standardized system of public finance, we have no other choice but to carry out the reform of"village-finance-supervised-by-county"system. The system rebuilds the process of financial income and expense, and .keeps it in the charge of treasury. On the other hand, it adjusts the administration authority of village financial institutions, and strengthens examination and superintendence power of county finance over village finance, so that village finance is standardized and proceeds smoothly. The reform is driven by central government and carried out all over the country, characterizing progressive impulsive institutional transformation. The reform of"village-finance-supervised-by-county"system keeps ever-expanding village debts, wastes and recruitment within limits so that the level of village and county finance management is greatly improved with manifold political combining meanings. However, it has its limits too. On the one hand, it has not uprooted the institutional fault causes of village and county finance; on the other hand, it has not dealt with the weakness of village finance. As a layer of institutional innovation,"village-finance-supervised-by-county"reform should be regarded as a transitional reform in the smooth development of village finance. It has to be innovated and improved further and carried out in broader areas. But the resolution to the problem of village finance is not to be confined to itself. The answer to it lies outside village level and finance. The necessary move in the near future is to consummate the institutional design of the reform and put it into real practice. What can be aimed at in the far future is to carry out the reform in the area of politics and administration, shaking off dualistic thoughts; increase transfer payment to rural areas and local governments with the aim of equalized public service, so that village finance can carry out its duty with adequate financial power; deepen the reform of budget and perfect internally and externally consistent examination system , so that village finance can develop on the solid foundation of institutions .