A Further Study On The Relationship Between Fiscal Decentralization And China 's Economic Growth

In response to the structural decline in economic growth,tax reform is placed in avery important position.Since the1990s,Chinese scholars followed the first-andsecond-generation theory of fiscal federalism to study the relationship between fiscaldecentralization and China’s economic growth and four inconsistent conclusions hasbeen drawn:First, the relationship between fiscal decentralization and China’seconomic growth is positive;Second, the relationship between fiscal decentralizationand China’s economic growth is negative;Third, there are significant regionaldifferences and across-time differences in the relationship between fiscaldecentralization and Chinese economic growth;Fourth,fiscal decentralization isconsidered to have no obvious correlation with economic growth in China.From themodel specification and estimation methods, metrics,data selection duration and scopeof the study and the theory about the relationship between fiscal decentralization andeconomic growth and other aspects related to the research,we carried outdiscrimination. Although the model selection, estimation methods, indicators and dataselection is an important causes of that different studies come to different conclusions,but exactly the opposite conclusion seems to provide further evidence for that thefirst-generation and second-generation theory of fiscal federalism assuming theexistence of a causal relationship between fiscal decentralization and economicgrowth has the inherent contradictions and conflicts.Fundamentally, this contradictionand conflict stems from its understanding based on the neo-classical economic theoryso that they failed to reveal the inner mechanisms of economic growth owing to thedivision of labor and market expand from the perspective of deep space, and theintrinsic relationship between fiscal decentralization and economic growth can notreasonably and clearly be explained.Future research efforts can be carried out fromfour aspects: First, the focus will turn to fiscal decentralization understanding betweenthe government and society from the inter-governmental fiscal decentralization;Second, we may determine the division of fiscal decentralization from revenuesources nature;Third, we may further consider the characteristics of the different taxarrangements for fiscal decentralization embodied; Fourth, we may further deepen thestudy based on economic growth and market division mechanism theory.It is in constant coordination of the conflict between non-empirical theory such asassumptions and concepts and empirical facts that the relevant research can be pushedforward.