The Efficiency Of Local Government Expenditure And Its Determinants

For a long time, in order to enhance the relative efficiency of fiscal spending, both central and local levels of government has taken certain measures, and has achieved some success. However, the efficiency of this public resource use is still generally considered in low level, related reports such as the non-standard use of fiscal spending are also often found in newspapers, which makes the government’s credibility suffer some degree of damage. In order to timely, accurately grasp the relative efficiency of local government expenditure, this paper try to analyze the relative efficiency of fiscal expenditure and its influence factors. This study helps to understand the situation of local government spending, while targeted measures to address the problems of financial expenditure, in order to facilitate the relative efficiency of fiscal spending to improve the country.In the beginning, this paper uses DEA method to analyze the relatively efficiency of government fiscal spending based on the consideration of related fiscal spending efficiency measurement. Then, using random effects Tobit model to measure the impact of several livelihood factors of local government finance spending efficiency, finally we get the corresponding analysis conclusions and policy recommendations.Firstly, this article uses data envelope analysis technology on our country’s30provinces and municipalities in livelihood expenditure in four areas (ie,1997-2012expenditure on education, health care spending1997-2012,2007-2012expenditure on social security and employment, environmental protection expenditure2007-2012) to calculate the expenditure efficiency.In the end, we find that,in these years, in spite of the increasing in government spending on education, the efficiency of the overall value of education is declining, the efficiency of health spending in most areas is decline, the efficiency of social security and employment in most of the regions is increasing, the efficiency of environmental protection in all the eastern regions is increasing, the environmental efficiency just decreases in two central areas like Shanxi, Jiangxi and four in the western regions like Guizhou, Shaanxi, Gansu, Qinghai. And then, this paper combines four parts including education, health care, social security and employment, environmental protection to analyze the efficiency of each areas, the results show that the efficiency of the eastern part get the highest score, better than the efficiency in the middle area, and the middle area is better than the western area, eastern Midwest three areas with significant clustering effect on expenditure efficiency score. However, the average efficiency of the value is0.69, is relatively low.Based on the above analysis, we then use the random effects Tobit model of efficiency score throughout fiscal expenditure and its impact on people’s livelihood and the relationship between the factors empirical research, model. The results show that Expenditure efficiency of local government finance has obvious regional differences, the efficiency of fiscal spending in the eastern region is higher than that of the central region,and the efficiency of fiscal spending in the central region is higher than that of the western region; the fiscal decentralization has an negative effect on local government spending efficiency. Fiscal decentralization has an negative impact on the eastern and western regions, uncertain effects on the central region, the degree of market has a positive effect on the efficiency of local government spending. Competition among governments has a negative impact on the efficiency of fiscal spending of local governments. Eastern and western regions of the Intergovernmental competition for financial efficiency of local government spending had a negative impact. The impact of competition on the central region of the Intergovernmental uncertain.Openness significantly increased the efficiency throughout the financial of the local government expenditures.Finally,this paper put forward the corresponding policy recommendations.