Fiscal Decentralization Theory And Practice In China

The theory of fiscal decentralization was seen as typical one in the current front theories in public finance, and it has become the world trend, especially along with the Soviet's disintegration and the enhancing trend of the globalization. The pioneers of researchers about this problem were Tiebout(1956), Musgrave(1959) and Oates(1972), the hypothesis of the likeness of market and "voting by feet" were the origins of the fiscal decentralization. Along with the development of information economics, Qian yingyi and WeingastB adopted new analysis methods to this theory under the traditional analysis frame. They tried to design the incentively compatible mechanism under the circumstance of asymmetry information so as to promote the efficiency of provision of Public goods. In China, the reform of public finance system has experienced a vibrating road, because of the characteristics of politic and economic system.This paper studies the theories of fiscal decentralization based on the research of economists mentioned above. Creative opinions include these as following:(1) .The definition of "the equilibrium of the market likeness"; and analyzing the showing mechanism of individual preference;(2) Using the Lonenc's curve and the law of Shorrocks to verify the role of central government in redistribution;(3) The definition of Chinese fiscal decentralization;(4) Evaluating the efficiency of reform of Public finance in China;(5) Presenting some new opinions for the reform of public sector.