The Economic Analysis Of Chinese Local Government's Behavior Under Fiscal Decentralization

New China has been established for 60th anniversary, looking back China's economic, social, and cultural development and so on in 60 years, it should be said that the Chinese government play an important role in this years, specifically the local government.Chinese local government is the main body, who undertake an important responsibility, play an important role in Socialist modernize Construction. And their behavior, the efficiency of behavior, have a direct and significant impact on local and even China's economic and social development. However, the local government is also on the focus of the various contradictions in the period of China's new and old systems transformation, their performance and behavior are debated by Parties. The local government has become a major bottleneck factor to promote and deepen the reform of the socialist market economy. Reasonable the local government behavior is the key of improving the socialist market economic system, completing the economic systems transformation.The theme of fiscal decentralization theory is to explore the effectiveness change that the decentralization reform brings in the countries, this effectiveness change are not only on behalf of economic performance, and the social efficiency as well as the corresponding relationship between the two.The fiscal decentralization reform is a measure in the decentralization reform in the countries, under the fiscal decentralization, it can enhance the enthusiasm of local government, but also prone to break the local government up, brings local protectionism, and causes the great differences in regional development. As the existence of these problems, fiscal decentralization is in stimulating the enthusiasm of local government, it also face many challenges.It becomes a hot issue in academic research and government's practice. For Chinese local government, it from mere policy executors to an own interests Suitors, and with the deepening of fiscal decentralization, it play a special role in their local economic development. Therefore, the study under the fiscal decentralization of local government behavior, can propose fairness and efficiency policy in accelerating the functions of local government change in China, in order to promote China's economic, social, cultural and other undertakings development. This paper is to study the behavior choices of Chinese local governments under fiscal decentralization,try to explore the deep-seated reason that influence their behavior choices, the financial system reforms as one that involve the vital interests of all levels of government, it must be produce a certain degree of resistance. So this article focus on the interests of local governments as an entry point to explore the behavior of decision-making, provides policy recommendations that can reduce the resistance in reform.The full-text is divided into four parts, research ideas are as follows:The first chapter is the literature review about fiscal decentralization theory and local government act theory at home and abroad. The first section of this chapter cards the literature of fiscal decentralization theory, concluding, under fiscal decentralization reform, the impact on economic development is double, and the study of Chinese fiscal decentralization reform should under the Chinese specific national conditions.The second and the third sections are the literature review of the local government act theory and the impact of fiscal decentralization on local government actions, so as to select the appropriate cut-point in this paper.Chapter two analyses the historical evolution process of Chinese Financial Management System. The previous two sections take 1994 Tax sharing as a demarcation point, introduce Chinese Financial Management System before and after 1994 Tax sharing, this evolution are mainly based on the actual economic development in different periods and the relationship between central and local government. The third section analyzes the impact of Tax sharing reform on fiscal revenue among all levels of government.Chapter three elaborates the interests'pattern among local government under fiscal decentralization. This chapter contents the interests'pattern between the central and the local government, the local government and the local government, the local governments and the economic interests in their area, and focuses on analyzing the relationship between the central and the local government, the local government and the local government, which is the most important interests pattern in Chinese local government behavior choices currently. The fourth chapter analyses the influence and consequence of the local government behavior under fiscal decentralization, which is the focus of this paper. This chapter divides the local government behavior into income and expenditure behaviors, in-depth and detailed analysis of the local government behavior and its influence and consequence by way of the tax and the transfer payments, the extra-budgetary revenue, the supply structure of public goods and the size of the local government in five aspects.Finally, it provides policy recommendations in local government rational behavior.This paper tries.to make a more systematic and in-depth analysis of local government behavior forms a new angle. The possible innovations are as follows: Firstly, it cards the financial management system of China more comprehensively, although each period has its own different characteristics, it adjusted timely basing on the real economic development in different periods, which is the fundamental principle that the current financial management system must follow. Only a comprehensive detailed analysis of the various historical periods of the financial management system, the reform can be drawn greatly from those experiences. Secondly, it describes the decision-making process of local government dynamic, intuitively and clearly, in use of game theory methods.It can be said that play the traditional political economy analysis tools vividly, and it is a challenge to use the econometric models of Western analysis economic problem in China. At the same time, future generations can learn from that. Thirdly, it takes benefit among local government as a focal point, analyses the aspects of the tax,the transfer payments, the extra-budgetary revenue and the supply structure of public goods in local government behavior decision-making in detail and comprehensively, in order to explore the cause and result in their behavior decision-making. Meanwhile, it draws extra-budgetary revenue, income outside the system and transfer payments etc. to reflect the real balance of payments situation among local government in the analysis, ready to provide basis of understanding in the final actions of local governments they choose.Similarly, the paper also has some shortcomings.That is, firstly, the data in this article appears not timely, because the financial data needs to query in official publication of the yearbook, while the data collection comprehensively takes a long period of time. Meanwhile, financial data query must be obtained through official procedures in China, so the county and township-level Can not be obtained through private means. Secondly, because my limited capacity and the paper length restrictions, this paper can not be more in-depth, detailed discussion of the issue, therefore, the interested scholars can conduct follow-up studies.