A Study On The Fiscal Transfer System At The Sub-national Level In Jiangsu Province

Intergovernmental fiscal transfer is an important part of the governmental fiscalrelation, which ensures residents in different regions enjoying basically the samefiscal treatment, thus achieving the equalization of basic public services. For a country,fiscal transfer consists two levels: Fiscal transfer system between the central andprovincial level and the fiscal transfer system at sub national level. This paperanalyzes the effects of the fiscal transfer system in Jiangsu Province, and hope thatthrough analysis provides a theoretical basis to further improve the existing fiscaltransfer system.This article uses empirical research methods with the correlation analysis,comprehensive evaluation method, in-depth study of the implementation of the effectsof fiscal transfer system in Jiangsu Province. Firstly, through the analysis of variationand coefficients, from both the province and county level, studies the fiscal balanceeffects. And through the establishment of model county revenues analysis the absoluteconvergence effect; Secondly, through comprehensive evaluation method, studies theequalization effect of basic public services; Finally, by statistical analyzing on thechanges of per capita GDP at county level analyzes the effect of fiscal transfer inpromoting economic growth.The empirical analysis shows, since2005, Jiangsu Province has increased theintensity of the fiscal transfer payments to the local government, and with theimprovement of the existing fiscal transfer system. It has achieved a significant effect,but the absolute difference of fiscal capacity between counties is still evident. Thedifferences in providing basic public services between counties are also obvious.Firstly, in equalization of fiscal capacity, vertical equalization effect is obvious, butfrom2000to2009, the fiscal transfer effects on the equalization of fiscal capacity atcounty level decreased at first and then increased; Secondly, in basic public services,from2002to2009, the total index of equalization effect on promoting municipalbasic public service is obvious, but not the same effect in every item. At the city level,the basic public service coefficients of variation showed decreased until2004, andincreased after2004. At the county level, equalization effects on basic education from2002to2009is good, while the equalization effect of the social security and healthservices at the city level is weaker, especially the difference of health services hasdistensible tendency; thirdly, the effects of fiscal transfer payment on economicgrowth, growth of per capita GDP at the county level, from2000to2009is significant, but the disparity of economic growth has been widening, declined slightly in2009.