The Research Of Fiscal Decentralization, Land-based Finance And Urbanization In China

From the perspective of fiscal decentralization, this paper studies the influence offiscal decentralization on urbanization. First, this paper conclude the relationshipbetween fiscal decentralization and economic growth, the fiscal decentralization caninfluence the economic growth by two ways, on the one hand, Fiscal decentralizationthrough improve the efficiency of local government supplies public goods and promptedthe local government to participate in the competition to promote economic growth; onthe other hand, the local government has it’s own pursuit of interest, in order to maketheir interest maximization, they will take some measures that be harmful to theeconomic growth. This paper argues that fiscal decentralization affects economicgrowth mechanism can also apply to the urbanization. On the one hand, fiscaldecentralization can enlarge local government expenditure scale and change theexpenditure structure of local government to improve urban infrastructure, expand thescale of the city, promoting urban development; On the other hand, fiscaldecentralization and local government competition induced land-based finance,land-based finance pushed up land prices, house prices, which is not conducive to urbandevelopment. This paper uses provincial panel data from1998-2010and2005-2010toconduct empirical studies, control the affection of Economic development level,industrial level and the level of education, the facts as follows: Fiscal revenuedecentralization and fiscal expenditure decentralization can significantly improve theurbanization rate and expand the scale of cities, Land-based finance has negative impactnon-agricultural population proportion, and has positive influence on the urbanpopulation proportion. In order to examine he relationship between the land-basedfinance, land price and urban population density, the paper using1998-2010provincialpanel data establish a regression mode, the conclusion is that land-based finance andland prices are negatively related to the density of urban population, which is oppositeto the higher of land price, the greater the population density in foreign countries. Itmeans that the local government gain high rental income from the land supply, whichpromoted public infrastructure investment and expand the city scale, but the high landprices, high housing prices, increased the cost of production and city life costs, goagainst with population migrate to cities, so population urbanization and theurbanization of land has been disconnected.