An Empirical Study On The Impact Of "Province Managing County" Reform On Fiscal Spending Of Primary Education At The County Level

To improve the financial situation of country level government, and further study the financial relationship of country level government, a new policy is applied in financial system which declares "province level government take direct control of country level government" (SZGX reform). Of all the researches about this revolution, there lacks the research on the effect of this revolution on compulsory education. However, through the expansion of county government power to enhance the local public service supply capacity is one of the important goals of the reform of "SZGX", the lack of relevant research made it impossible for us to conduct a comprehensive evaluation of the implementation effect of the reform. In the current local fiscal expenditure in county level, the compulsory education expenditure is the largest proportion of the public service expenditure. The development of China’s compulsory education is now facing two major problems, lack of financial investment and regional differences. Therefore, this associate based on the date of 2005 and 2007 county (city) level, and used the methods of "propensity score matching" together with "double difference" make a "Quasi experimental design", and deep empirical study on three questions as follows:At first, whether the reform improves the local county expenditure level in primary school? Second, does the reform narrowing the fiscal expenditure level difference between urban and rural primary school. Third, whether the reform reduced regional disparity of primary expenditures.After use propensity score method combined with double difference method to correct the deviation of estimated, the estimated coefficients of "SZGX" reform variables decreased significantly compared with OLS and simple double difference method. "SZGX" reform has increased primary school compulsory education expenditure by 138.42-190.82 yuan average per student in elementary school,this reform to a certain extent, promoted the increase of county compulsory education expenditure; After estimating the rural sample data, the impact of the reform to county administrated by province" is greater. because of the reform, the primary school education expenditure has raised 217.37-316.33 yuan in rural. This will be conducive to narrowing the gap of compulsory education expenditure difference of urban and rural areas. But the difference among east, middle and west regions has moved the other way. The increase of compulsory education expenditure of elementary school in the east is beyond that in the middle, while compulsory education expenditure tends to decrease in the west. "SZGX" reform pull big difference between regions. In addition, this associate also found that effect of different types of transfer payment on primary school education expenditure are significant differences. On improve the local county primary school education expenditure, general transfer payments is better than special transfer payment. From the nationwide situation, the rural compulsory education grant aid effect is not ideal, the estimated coefficient is significantly negative. In the midlands, it has significant positive effects primary school compulsory education expenditure, but in the eastern and western regions, the impact of the subsidy is significantly negative.Finally, this associate provides some policy advise for "SZGX" reform and compulsory education expenditure policy. Including:expand the scope of "SZGX" reform and further standardize the under province fiscal relations, incentive of local government compulsory education investment intention supporting transfer payment and establishing the "SZGX" reform effect evaluation mechanism.