Research In The Impacting Factors Of Scale Of Local Government In China

Exploration of the size of government has always been focus of economic and academic research. Since the1980s our country has carried out the institutional reform for six times, but for the current situation, the scale of China’s local governments is still not out of the cycle "Streamlining-expansion-to further simplify-re-expansion". The government’s financial scale is showing an trend of expansion. Therefore it is necessary to study the factors that cause local changes in the size of government, eliminating the negative effects caused by the excessive expansion of the size of government. So we can effectively control the size of the local government.This paper first introduces the theory of the size of government as a starting point, and then analyzes the changes in the size of China’s local governments; we have a particular emphasis on factors affecting the size of the local government, as well as the degree of influence of various factors combined with the special circumstances of our country. At last we hope to arrive at a method to control the size of the local government. The first chapter introduces the problem proposed、the background, and then leading to the theoretical and practical significance of studying the impact factors of the size of the local government. Review of the literature in the second chapter introduces the concept and metrics of the size of government in China, as well as the research results at home and abroad. The third chapter gives us a detailed analysis of the changes in the size of China’s local governments and the reasons. The fourth chapter analyzes the factors affecting the size of the local government from political factors, economic factors, and social factors. At the same time we have established an empirical model, analyzing the specific impact of various factors on the scale of local government by the empirical regression. Chapter Five is conclusions and policy recommendations of this article.Through this analysis, the main conclusions are:From the perspective of political factors, fiscal decentralization and local competition have a positive role in promoting the size of government; From the perspective of economic factors, economic structure has a positive relationship with the size of government, the level of economic development and trade liberalization can make government downsizing, while the impact of trade openness on the size of the local government is not very significant. From the perspective of social factors, the impact of demographic factors on the size of the local government is not very significant, income gap and ethnic factors promote the size of government. We thus put forward policy proposals to control the size of government.