Research About The Influence The Behavior Of Local Government On Finance Developmen

Financial institutions cannot only transfers wealth in the hands of the residents into society through the channel of savings— investments into social.But also can gather up idle funds for business development and financing through stocks, bonds, funds and a variety of insurance products, which meets the funding needs of social and economic development. Developments of the financial sector have a huge impact on economic development. Under decentralization, fiscal balance of payments pressures increases, and under economic growth as the standard of the performance appraisal system, in order to ease the financial pressure on government revenue and expenditure, local government will inhabit the regional financial development. This has a huge impact on financial development. Therefore, under the decentralized system, this paper studies the relationship between the behavior of the local government and financial development in different regions by analyzing empirical methods, and provides practical advice for the promotion.Using the theoretical analysis, this paper summarizes the fiscal decentralization theory, regional financial development theory and the correlation of local government behavior and regional financial development theory, and finds that most scholars believe that the impact on the regional local government is not a single and changes along with a variety of different external. This provides a theoretical for this research. Using of standardized analytical methods, this paper studies the reason for government financial intervention, the way of intervention, the positive and impact of the intervention. The results found that financial markets need government intervention because of the financial market problems. Government regional financial development through the various channels; however, excessive administrative intervention of local governments also caused a series of adverse consequences. Finally, using of empirical analysis method, this paper studies the correlation between the behavior of the local government and regional financial development. Results of the study found that local government intervention inhabits financial development of the eastern region, and promotes the financial development of the Midwest. But role in promoting the western region is greater than the eastern region.Through this study confirmed that the local government will have an impact on the regional financial development, and this effect will vary with different regions. Local government intervention promotes the regional financial development in western region where the economic is relatively backward. With the improvement of the level of development, the promotion will be gradually reduced. But the promotion will transform to inhibition when the economic development reaches a certain level. Thus, in conditions of economic development backward areas, the government should encourage financial intervention. And with the economic development, the government should gradually liberalized financial intervention. And finally we should release the financial intervention. Our performance evaluation system of local government has increased the degree of intervention in the area of the financial industry, and caused the loss of social welfare and inhibit the development of the financial industry. So we should change this evaluation system.