Empirical Analysis On Fiscal Decentralization And Social Essential Public Services Supplies

Since the reform and opening up, with financial reform being a breakthrough, China implemented a series of progressive economic reforms, created the "China miracle" of rapid economic development. However,"solid country benefits people’s livelihood". When economic developed, the next important goal is to increase social welfare level and improve people’s living conditions. According to the five overall layout of Chinese characteristics socialism, the party’s18report proposed the goal of "building a moderately prosperous society", one of the requirements is the overall equalization of basic public services. However, in the current situation of China’s comprehensive development, contrary to the economic growth, the social essential public services, containing compulsory education, health care, social security and employment, are still showing significant poverty and inequality, especially in the central and western regions. Thus, in the current situation, studies on the supply of social essential public services have an important practical significance.To achieve the overall equalization of basic public services, we must examine the current supply of basic public services, the underlying causes of inequality, and the targeted improvements. In fact, the inadequate supply of the most representative social basic public services containing compulsory education, health care, social security and employment is different from the inequality in the failure of the market mechanism. The supply of basic public goods is inextricably linked with the government internal mechanisms, especially financial institutional arrangements. In this context, this paper combines theoretical and empirical study of the path and the actual effect of fiscal decentralization on the supply of social basic public services, and puts forward relevant proposals and measures to promote the equalization of basic public services.Currently, China is implementing a tax-sharing system,according to the principles of combing financial authority and expenditure weights, distributes taxes between the central and local governments to determine the income range of the central and local governments. In China’s unique political and social forms, the tax-sharing system is actually a fiscal decentralization system with Chinese characteristics, commonly referred to as "Chines e-style fiscal decentralization". According to Western theories of fiscal decentralization, fiscal decentralization will help to improve the supply of public services. According to the research findings of Chinese scholars,. Chinese-style fiscal decentralization will inhibit the supply of basic public services. This is because the Western mainstream fiscal decentralization relies on the two mechanisms "hand vote" and "feet vote", which conducts a double incentive and binding mechanism, so as to retain local governments’public service supply behavior,and improve the supply of basic public services to win votes. However, in China, politics is highly centralized,urban-rural structure is solidified,the "hand vote" and "feet vote" mechanisms do not exist. For a long time, China’s fiscal decentralization is precisely lack of the incentive and banding mechanisms, failing to improve the supply of basic public services,and becoming the institutional factor of restricting its reasonable growth and balanced development.Firstly, the paper reviews domestic and foreign researches on fiscal decentralization and public services, analyzes the mechanism that fiscal decentralization effects the supply of public services, elaborates the cross-interference of some factors such as the matching degree of revenue and expenditure decentralization, the validity of transfer payment system and performance appraisal system, founds that fiscal decentralization shows inhibitory effect on the supply of social basic public services. Then, the paper takes the central province Jiangxi Province as an example, cards the inequal and inadequate supplying status quo of education, social security and employment, health care,and constraints such as finance, economy, institution.Then chooses19years’Jiangxi provincial statistics and7years’county-level statistics, empirically analyzes the effect of fiscal decentralization on social supply of basic public services, the conclusion is consistent with the theoretical analysis.Finally, this paper presents transforming government functions, specifying expenditure responsibilities of local government; protecting local financial resources, changing eating finances, eliminating the over-reliance of local government on transfer payments; scientifically assessing performance, cancelling the dominance of GDP, establishing performance evaluation system of public service; strengthening financial supervision, weakening the asymmetry of information, perfecting government information disclosure and budget management system; exploring diverse supply to play the role of financial incentives, introducting competition in the supply of basic public service, in order to play the fiscal decentralization’ security role in the supply of basic public services.