Study On The Problems Of Local Government Debt

Since the reform of tax-sharing system, the governance division of the rights of property and power between the central and local governments has been clear. The financial resources of the local government shifted up; meanwhile, the expenditure of local government was expanding. The discordance of the financial revenue and expenditure has become the major obstacle to limiting the local government to exercise the local functions. In this case, the local government had to borrow money to meet the demand of increasing expenditure. However, with the continuous expanding of liability scale of our local government, the issue of local governmental liability became a controversial focus in educational circles day by day.This dissertation will be divided into six chapters to study the issue of local governmental liability. The first chapter will focus on the relevant research results at home and abroad and comment on relevant issues by combining the current situation of our local governmental liability. The second chapter will be related to the related concepts and classifications of local governmental liability, and analyze the economic effect of China’s local governmental liability in detail and then make a summary. The third chapter will be the core of this dissertation, which will analyze the financing, scale, structure, purpose and payment term of China’s local governmental liability thoroughly. In addition, it will probe into the reasons why local governmental liability is expanding. China’s local governmental liability plays a pivotal role in the process of local economic and social development. Due to the imperfection of China’s current law, policy and regulation on the local governmental liability, the local government will make some mistakes inevitably in the process of borrowing. Thus, chapter four will make a detailed summary on these issues. In addition, in order to control the scale of local governmental liability, chapter five will evaluate the risks on China’s current local governmental liability. Last but not the least, chapter six will put forward some policy recommendations on how to solve the issue of local governmental liability in the future.In the process of writing, it will focus on the literature analysis and theoretical analysis in the first half of this dissertation. In order to obtain more popular research method as well as its conclusion, this dissertation will collect many theoretical and empirical data on local governmental liability, upon which it will analyze the differences of these results. On one hand, it will consult the related material at home and abroad, study the rationale on local governmental liability and explain the reason for borrowing; on the other hand, it will analyze the theory on the basis of existing research and study the optimal mode of local government borrowing. In the second half of this dissertation, it will be quantitative research and model checking. In order to make an effective assessment on the scale of local governmental liability, it will select an appropriate method to analyze the potential data on the basis of existing literature. Compared with the previous literature, this dissertation will focus on the borrowing behavior of China’s local governmental liability at the post-crisis period, analyze the current situation of China’s local governmental liability comprehensively and thoroughly, as well as probe into the reasons why local government make some mistakes in the process of borrowing. Lastly, because of the limited time and the author’s academic level, it may ignore some factors in the process of local assessment; therefore, the assessing results may not be as precise as it should be.