The Study On Fiscal Expenditure And The Convergence Of Regional Economy In Anhui

The balanced development of regional economy is a long-term goal for a region,and fiscal expenditure is an important factor for regional economic development,therefore, the government is paying more and more attention to the fiscal policyintervene regional economic development. This paper mainly researches on fiscalexpenditure and regional economy convergence in Anhui. Firstly, it expatiates twoconcepts of convergence in neoclassical economic growth theories and new economicgrowth theories. Meanwhile, it analyzes the influence that fiscal expenditure scale andstructure brought on economic growth, which has laid a theoretical foundation for thisstudy. Then this paper also analyzes the present situation and trend of territorial gap inAnhui Province. On this basis, it expounds the reasons for the existence of theregional economic disparity. Afterwards, the paper uses the absolute convergence andconditional convergence model in neoclassical economics, takes the per capita GDPgrowth rate of cities in Anhui Province,fiscal expenditure scale and structure from1997-2010as essential data, then uses the fixed-effect model of panel data regressionto analyze the convergence model of regional economy in Anhui Province since1997.At last, according to the empirical findings and the realities of Anhui, this paper putsforward some fiscal expenditure policies in both fiscal expenditure scale and structureto coordinate regional economic development in Anhui.The results show that: according to present condition of territorial gap in Anhui,there is a big gap in different cities, the area along the Yangtze River in Anhui isobviously more developed than the northern, central and southern areas. This gap isvery small within the southern area and the area along the Yangtze River. While thecontrary case within the central and northern areas. Based on the change trend ofterritorial gap in Anhui from1997-2010, we know that the changes in the economicgap was much smaller in1997-2003than in2003-2010. Besides, in central andnorthern areas, the territorial gap was bigger and bigger during1997-2010. As for the southern area and the area along the Yangtze River, the economic gap also becamebigger and bigger in former years within1997-2010, but the gap turned smaller later.There is an absolute convergence in southern area and the area along the YangtzeRiver, but not in northern and central areas. After joining the fiscal expenditure scale,conditional convergence exists in the whole Anhui Province, northern areas, centralareas, southern area and the area along the Yangtze River. The capital constructionexpenditure, education spending, forestry and water affairs expenditure haverespectively promoted the convergence of regional economic development more orless. While the expenditure for science and technology, expenditure for social securityand employment, expenditure for public health and administrative expenses haven’tplay a great role in reducing region growth gap.