A Study Of Local Government Investment Efficiency

Government investment is an indispensable part to maintain rapid economic growth in China. After financial crisis in 2008, the central government launched four trillion investment plan to deal with economic decline, the end of 2010 drawing to a close.2011 is the first year of "second Five Year Plan", local governments will continue to maintain the scale of investment, and develop local economy. However, in China financial system is not fully developed of decentralization, and form has not been standardized conditions, institutional factors failed to form a good investment behavior of local government incentives and constraints, leading to high investment rates with our low investment efficiency are often this inefficiency often to "excessive investment", duplication or excess capacity and waste a lot of investment and other forms, and the sustainable development of China economy a barrier. Therefore, in 2011, and after a long period of time, the efficiency of local government investment remains particularly critical.This paper tightly around the impact of fiscal decentralization reform of the factors of fiscal decentralization on the impact ways of China local governments to improve the system of fiscal decentralization as an entry point for China local government investment efficiency to make recommendations accordingly, the paper is divided into six sections specifically addressed:The first part is the Introduction, first, illustrated the background and significance of this study, based on the definition of the concept of local government, local government investment, local government investment efficiency, fiscal decentralization, description of paper the main ideas, the framework arrangement and research methods.The second part comb at home and abroad about the investment efficiency, fiscal decentralization, local government investment behavior and other aspects of the research literature. The first part of Section issues on the fiscal decentralization literature to sort out, from the theory of fiscal decentralization, fiscal decentralization is measured, fiscal decentralization and local government investment in three areas are briefly summarized. SectionⅡis the efficiency of government investment literature review, the efficiency of investment from the government to measure and improve the efficiency of the two aspects are summarized.The third part through the efficiency of local government investment in the status of theoretical study and empirical analysis, reveal the existence of local government investment in efficiency losses. The first section, there is a brief introduction to the powers'scope of responsibility and the investment functions which should be assumed by local governments. SectionⅡthrough analysis example the phenomenon of local government investment, local governments were to reveal the scale of investment, structure, status output and efficiency losses and problems. Section III using the method of measurement tests, through the establishment of the basic production function model, empirical study of 1994 tax system reform of China investment efficiency of local government, come to reform the efficiency of local government investment declined conclusions.The fourth part mainly on the basis of the review of the development process of China fiscal decentralization system, there had a rough inspection on our current level of fiscal decentralization, and had made a basic evaluation on the current system of fiscal decentralization. First section reviewed the three main financial system development stages. SectionⅡof our first three ways to measure the level of fiscal decentralization, fiscal decentralization come to our current form is not standardized, decentralized system is not perfect conclusion. Second, decentralization of financial problems were analyzed that fiscal decentralization system problems include:duty of local government spending too much to bear, and smaller does not match the financial power; fiscal transfer payment system is imperfect.Part V from the perspective of game theory to analyze the approach to fiscal decentralization on the efficiency of local government investment.ⅠandⅡin the local government investment in game theory based on assumptions, describes the political promotion of the game, the central government and local government vertical game, the game between the horizontal local government relations on the three basic models. SectionⅢunder the conditions established in the model, from the responsibility of local government expenditure is too large and too small to have the financial power of these two major problems the negative effects of perspective to a system of fiscal decentralization on the efficiency of China local government investment in the transmission mechanism, that fiscal decentralization under the ultimate impact of the malignant behavior of investment in local government investment efficiency.Part VI, from the sound financial management system based on revenue-sharing perspective, proposed to increase the efficiency of China local government investment in several recommendations, including reasonable level and local government expenditure responsibilities, financial resources to develop local stability, build standardized fiscal transfer payment system, a sound evaluation mechanisms and local government officials to speed up the reform of budget management system.Many scholars at home and abroad have on fiscal decentralization and efficiency of government investment had a lot of rich innovative and stimulating work, the formation of a large number of objective and useful conclusions. But for the system of fiscal decentralization and local government combined with the efficiency of investment, from the perspective of the government's fiscal decentralization decentralized investment decision-making to local effects after the study was relatively small. This article has been fully absorb and learn on the basis of academic achievement, try again from a new angle dialysis fiscal decentralization system and local government investment efficiency of the internal logic, and local government investment to make some suggestions to improve the efficiency, this is also the possible innovations.Similarly, the article also has some disadvantages, mainly in the following areas. First, organize all this data from the Statistical Yearbook, some data may have some lag; Moreover, in China special conditions and development stage, the financial data below the provincial level, especially county-level fiscal data through private access very difficult. Second, the article studies involving many aspects, with some difficulty, I have limited capacity, while limited by the length of the article, some of the content could not be more in-depth Analysis. These are studies in the future can be further explored and improved.