How Fisical Transfer Payments Impact The Revenue Of Counties In Inner Mongolia

Fiscal transfer payment is an indispensable part of financial system. It functions are equalize fiscal revenue between different areas and levels, correct the externalities of public service and make sure that the policy of central government will be implement successfully. In order to make clean whether fiscal transfer payment reduce the fiscal gap between county governments, this thesis make 101 counties from Inner Mongolia Autonomous Region as the research object. All the data I use is from the Inner Mongolia fiscal yearbook and the Statistical yearbook of China. In this reach, the software statistical package for the social science as well as the method comparative analysis has been adopted.The content of the research contains analyzing the fiscal system of Inner Mongolia, the revenue of provincial government, municipal government and county government both in landscape orientation and length wise direction. The fiscal transfer system of Inner Mongolia is consistent with that of the central government in the respect of transfer type, structure and major changes of the transfer system. The autonomous region government plays a important role in refining the transfer policy and distributing the transfer payment between government of different areas and levels. The revenue which the autonomous region government transfer to local government mainly come from central government, which means that only a small part of the transfer payment comes from the autonomous government expenditure. There are 101 counties in Inner Mongolia, the fiscal revenue between counties differ from each other remarkably. The more economically developed areas, the higher the level of revenue, whereas a low level of revenue. After calculating the coefficient of variation of 101 counties revenue, I found that fiscal transfer payment have decreased the variation of disposable revenue of every counties. However, over the years, the disparity between the counties has expended. Even more, the transfer may produce much more difference between the rich and the poor counties. This is because that the fiscal transfer payment has preferentially been used to balance the disparity between municipal government's revenue rather than that between counties.The policy object of Inner Mongolia's transfer payment are balancing disposable revenue of different areas, maintaining the interests of existing pattern as well as guarantee the normal operation of local government. However, this target location give rise to greater disparity between counties, which makes some local government have no fund to provide basic public service.In order to reduce the fiscal disparity of different areas especially that between counties, I suggest that equality should be set as the main goal of fiscal transfer system, and the reform of fiscal transfer system should be guided by this goal.