A Study On Public Budget Supervision Of Local Government In China

Government budgeting refers to the revenue and expenditure in public sectors, which reflect governments'economic behaviors in certain areas. According to the constitution and Budget Act in China, People's Congress are required to investigate and ratify governments'budgets and need to monitor the enforcement of budget plan. This is one important way for the public to keep an eye on the government's economics behaviors. As the main economic behaviors of the government, government budget should be supervised by the public or the representatives of public, however, like most of the scholars in China had pointed out that there is still a long way to run to perfect the supervision mechanism of government budget. Gratifying thing for the moment is that most of the government organizations are willing to take reform in aspect of government budget management. Though we had made a great progress in department budget reform, treasury centralized paying reform and government purchase reform and so on, and compared to the past, the people's congress nowadays have more specific details in the budgetary documents and information of the government revenue and expenditures are more clear, audit programs are more and more former, however, the government budgetary management of our country still far away from a reasonable situation. There are many reasons for this including political issues, economic issues and cultural issues and so on. It is necessary and significant to continue to carry forward the building of the local government budget mechanism if take a look of the framework of the whole government budget issue in our country. Considering the government budget documents are examined and approved from the bottom government organizations to the top government organization, it is important for the central government to strengthen the local government budget mechanism. We had, actually, made a great progress in perfecting the democratic budget mechanism in the local governments. For an example, Participatory Budgeting of Wenling City in Zhejiang province had been followed by many other cities in China due to its advantages in public budget. This sends out a sign that it is possible to promote democratic budget in China. However, government budget covers many complicated principles in economics, management, ethics and politics, and that's why no one would say it is an easy job to do.So basically, this paper is going to discuss and analyze the main problems that the people's congress, public and governments would encounter in the practice such as adverse selection and moral hazard issues in the framework of agency by agreement, and prepare to make some policy suggestions based on the analysis of the problems. In the first chapter of this paper, it mainly brings out the backgrounds and provides a literature review about the topic. In the second chapter, the importance and significance of strengthening supervision mechanism of government budget in the framework of public finance will be discussed and analyzed. At the same time, a Zero-game Model and Conspiring Model would be built in the process of government budget to discuss and analyze the factors that effects the competition and performance about public finance by the points of agency by agreement. Chapter 3 had analyzed the problems of local government budget in each separate four stages and reasons behind them such as budgeting examine and approve implementation and final budget. These problems send out a sign that it is necessary and important to perfect the budget mechanism in China. Chapter four provides some suggestions on how to specifically promote the budget mechanism after reviewing the games between the public capital suppliers and demanders. At the end of this paper is the conclusions and future direction of the academic research about this topic. Say, we need to analyze the issues of budgetary transparency, government finance risks, and performance of public expenditure and democracy political environment building in government budget and so on in the future.