The Effect Of Fiscal Equalization Transfer Payments By The Shaanxi Provincial Government

Interlocal economic development of China is unbalanced. The financial disparities among provinces and inter-province are big. The gap on the level of basic public services provided by Local governments is huge. Resolving the financial capacity of regional horizontal and vertical imbalances by the government transfer payments, in order to achieve coordinated development of regional economy has always been the focus of our government. For this reason, many scholars have done many studies and researches on the effects of the financial balance of transfer payments. At current, our government has repeatedly raised the goal of equalization of public services, so researching the effects of the financial balance of transfer payments is particularly important.In the present theoretical studies, although the research about the fiscal equalization by intergovernmental transfer payments is much, most of the researches are analyzing the fiscal equalization of the whole country. The research about transfer payments of the province is still significant pale.This article narrow the scope of the study, research the fiscal equalization effect of the government transfer payments in Shaanxi province. After reading about the research results on the equalization of the intergovernmental transfer and the theory on government transfer payments, firstly, this article gives a detailed study and description about the status of transfer payments in Shaanxi province and analyzes the problems of Shaanxi province's transfer payments; secondly, using the data of 2001-2009 Shaanxi province's transfer payments, analyses the effects the government transfer payments in Shaanxi province. Specifically, this article analyses the vertical equalization effect of Shaanxi province's transfer payments, the horizontal equalization degree of the Shaanxi province's transfer payment and the fiscal equalization degree of sub-transfer payments. By that, the article concludes that transfer payments in Shaanxi province does not improve the situation of vertical imbalance of financial resources, but it has a certain effect of horizontal fiscal equalization, and the equalization effect of financial transfer payments is strongest in all kinds of transfer payments; special transfer payments in the fiscal equalization effect is stronger than tax return and the original system subsidies. Finally, based on the conclusions of empirical analysis combined with the reality, this article gives the policy recommendations on how to improve the financial equalization effect of intergovernmental transfer payments in Shaanxi province.