Research On The Game Between Central And Local Authorities In Financial Reform

Financial system is one of the important factors which influence and constrain the economic development of a country. Whether the design of financial system is reasonable or not is directly related to the prospect of macroeconomic development of a nation. The financial system in China is keeping in line with the pace of all-round reform and opening upIn the process of China’s financial reform, the game between the central government and local government is long-term and common, which has advantages and disadvantages to economic development. The financial reform in China mainly revolves around the relationship between central coffer and local finance. To put it simply, that is, the central coffer is strong while the local finance is weak and vice versa. It has been found that when the central coffer is too powerful while local finance is weak, the enthusiasm for economic development of local government is suppressed and the economic development slows down and that when the local finance is too powerful while the central coffer is comparatively weak, the macro-control ability of a nation will be weakened and even the country’s stability will be affected. How to divide the finance power between the central government and local government rationally and scientifically to make sure the economic development in China is at her best, which is pretty complicated.This thesis starts with the objective reality of game between the central coffer and local finance in financial reform and after reviewing the history and status quo of this kind of game this thesis defines the type of game between the central government and local government in financial reform:the coexistence of dynamic games of complete information, dynamic game of incomplete information and static games of Incomplete information. Based on this definition, the reason why the problem of game rises is analyzed from three aspects:objectivity, subjectivity and inevitability. Finally, it arrives the correct understanding about the game between the central coffer and local finance in financial reform, that is, the objective reality of game is inevitable, so we need to look on this phenomenon dialectically. Concrete speaking, we should eradicate the game aroused by subjective reasons and try to avoid the game brought by objective reasons and hence clear up the vicious game; we should make best use of the inevitable game to ensure our reform and opening up at high efficiency, create a thicker atmosphere for democracy and achieve full-scale development of socialist market economy by using the benign game which is in favor of economic development. As the game in financial reform is just an ingredient of the whole entity of the existence of the game between the central authorities and the local government, we need to adopt the same serious attitude toward the whole entity dialectally. It is firmly believed that as the relationship between the central and local authorities is enhanced continually through the game, it will be increasingly adaptive to our future development and make proper contributions for more significant achievements in the overall development of China.