Research Of Expenditure Competition Between The Governments Of The Country Level Under The Province-Direct-Governing-County Fiscal System

In 1994,the fiscal and tax reform established the relationship between the central and the province government,but under-province-province fiscal system were not clear. For clearing the under-province fiscal system, the ZheJiang province first practiced the Province-Governing-County Fiscal System since 1992.AnHui,HuBei,ShanDong province practiced this fiscal system between 2003 and 2005. The Province-Governing-County Fiscal System endows the country government more and more economical rights and enhance the independence of the country government. Under the encouraging of the economical and political profits, the governmental officials strengthen the expenditure competition and change the ways of it. At first, the country governments adopted the tax-competition such as tax preference in order to attract the economical resources. But later the way of tax-competition cannot continue to play a role accompanied by the perfect of the tax system, so the country government changed to choose the expenditure competition to attract the economical resources, Since then, the way of expenditure competition became the primary way of the fiscal competition.This paper has six parts:The first part is preface, it introduces the the background and meaning of research and some concept definitionsThe second part explains the change from the system of the city-administrating-country to the province -administrating-country with the theory of fiscal decentralization and institutional changeThe third part researches the changes of the expenditure competition environments under the province-direct-administrating-country fiscal system:First. the relations between governments become complicate. Second, the resources of the country governments become abundant. Third, the country goverments become more positive to develop the local economyThe forth part analyses the changes of the expenditure competition ways under the new province-direct-administrating-country fiscal system First, the ways of the expenditure competition become abundant. Second, the way of capital construction expenditure competition plays a primary role, Third, the ways of medical treatment and public health expenditure competition are ignored. At last, the country governments appear unrealistical comparisionThe fifth part analyses the intensity and effect of the expenditure competition under the province-direct-administrating-country fiscal system by the analysis on the AnHui province economic data., the new fiscal system enhances the intensity and the effect of the expenditure competition,On one hand, the expenditure competition in the new fiscal system promotes the system innovations and improves the infrastructure. On the other hand, the expenditure competition between the country governments lacks the MinSheng expenditures and widen the regional disparityAt last,in order to play the active effects of the expenditure competition in the province-direct-country fiscal system. I put forward some suggestions. Such as: changing the functions of the local government and accelerating the construction of service-oriented governments,boosting the Province-Direct-governing-County administrative reform,to perfect the system of transfer payments in China,to built new assessments on the achievements of the local governments,to enhance the supervision on the local finances under the province-direct-governing-country fiscal system and so on.