Research On Principal-agent Problems Of Department Budget In China

Department budget is the comprehensive reflection of department budget activity. In recent years, China continuously push forward the reform of department budget, through the unremitting exploration and practice, reform gained revolutionary headway, preliminary built system integrate with the international practice, and adapted to the socialist market economy system of department budget management mode and operation mechanism. Government budget implementation is benefit to achieve the government’s financial management in accordance with the law and democracy, at the same time it is also has very important significance for strengthening fiscal expenditure management and raising the using efficiency of finance capital.As the new things in China’s financial reform, the department budget system reform although obtained certain good result, but still have many problems and is not mature enough. The audit reports on the central budget and other fiscal revenues and expenditures show, budget is not standardized and refinement, illegal use of fiscal funds, waste of financial situation is often appeared, this still has some distance to follow the true, legitimate, complete, clear, performance of the departmental budget reform principle. Many reasons resulted the problems in department budget, one of the important reasons is there exist multiple layers of principal-agent relationship that in the departmental budget preparation and implementation process, in the absence of perfect incentive and supervision mechanism, the agent is likely to deviate from the principal objective function, caused the agents to their own advantage in damaging the interests of the principal, which also caused the department budget problems.Based on the principal-agent theory, thesis researched the department budget problems again. The thesis is divided into five chapters, the first chapter introduces the research background, research significance, research status at home and abroad, the main research content, research method and innovation; the second chapter is about the department budget system evolution and analyzed the six layer of agency relationship in the department budget, the last layer of agency relationship between suppliers and government is a simple expansion in the previous studies. At last on the basis of comprehensive analysis of various scholars the principal-agent relationship were moderately simplified; the third chapter discussed the principal-agent theory, the principal-agent problems in department budget and the reasons caused these problems; the fourth chapter analyzed the British and American department budget system and the method of the two countries in solving the principal-agent problems in department budget in practice, in order to gain some suggestions to solve principal-agent problem in department budget in our country; the fifth chapter proposed some solutions to solve the principal-agent problem in department budget in our country and also proposed some corresponding reform measures.