Evalution Of China’s Regional Public Expenditure Efficiency And Prediction

Since1994the central government started to reform the tax system,the ratio ofrevenue and expenditure has shown to be upward trend. The efficient of publicexpenditure is still on a low level because the fiscal competition between localgovernments and local public, spending gap is widening and expenditure structure isirrational and the channel of demand preferences display blocking. It is necessary tore-consider the evolution process of regional expenditure in order to find out why itsefficiency is low. This process need to consider a lot of factors, including the totalexpenditure and the consideration of the structure and the private sector preferencessocial and economic development and so on.So this paper create a two-stage NDSC model which can evaluate the publicexpenditure efficiency based on the preference of private department and thegovernment public expenditure form the angle of input and output. It uses the publicexpenditure data of1998-2009and private expenditure data of1998-2009and someother social welfare index to analyze the law of local government public spendingefficiency and which has caused the change.The results show that in2009, China’s provincial public spending was increasing.From the evolution of the trend, China’s public spending in most provinces arenon-active. The eastern, central and western regions the general trend of the evolutionof the efficiency of public spending remained stable after2006. But the westernregion appear greatly enhance the relative efficiency and over eastern and centralregions; eastern provinces(Guangdong, Jiangsu, Shandong) and some majoragricultural provinces (Sichuan, Henan) dramatic changes in the efficiency of publicspending. The next five-year forecast shows that the three areas of publicexpenditures will keep in a non-active state, and the gradient distribution stillexists.According to the analysis, resulting in China’s regional public spendingefficiency include the main changes in national tax reforms, the rise of westerndevelopment and implementation of the strategy in central, coastal industrial transferand the imperfect preference reveal mechanism. In the end, this paper propose toenhance the efficiency of public spending to promote the region’s policyrecommendations, that the regional economic development and public expenditurepolicies to provide a reference.