A Study On The Financial Difficulties Of The County And Township From The Perspective Of System Of Organization

The tax-sharing institution reform of the financial system in 1994 has made a great success. This reform has improved the financial situation of the central government, turning the conditions that the revenue of the central government was in a lower proportion in the national revenue as a whole, and strengthening the control of the macroeconomic, which conforms to the requirement of operation of the hierarchical fiscal system. Meanwhile, the reform has aggravated the financial difficulties of the basic unit government, increased the fiscal deficit, affected the normal operation of county and township government, and would influence the stability of the primary political power and the building of harmonious society as well.To the problem of financial difficulties of county and township, majority of scholars make an answer from the perspective of fiscal revenue and expenditure, thinking of that the local governments need corresponding revenue to perform its functions. With the financial difficulties, they claim that the basic unit government should make effort to develop the region's economy and increase local government revenue by any ways, while the basic unit government should take measures to reduce expenses, such as eliminating unnecessary agencies and reduction in government employees and so on. These studies play a positive role in alleviating the financial difficulties of the basic unit government, however which do not break away from the discussing the financial trouble on the basis of revenue and expenditure, and could not make an in-depth analysis on the causes which leads to a basic balance between revenue and expenditures.In this paper, the system of organization which leads to the financial difficulties of the county and township will be discussed, according to the related principles of New Institutional Economics, Public Choice Theory, Management, Political Science. Our country is in the transitional period of the development of economy and society with imperfect financial system, more government hierarchical levels, low self-governmental capacity of basic organization and divided power longitudinally from central government to the local government. These institutional drawbacks have strong relationship with our traditional political culture, economic and social infrastructure. In the light of the basic unit government financial difficulties which arise in the process of carrying out the system of the tax-sharing institution, there is a solution which can be carried out from 3 layers:make clear of the (?)ibility of the basic unit government, and its corresponding revenue, and perfect the tax-sharing institution; reduce the government hierarchical levels and optimize the administration frame; grnsadually traform the patterns of financial division of power and push ahead with local self-government.