The Research On Local Government Debt Management Institution Construction In China

China’s local government debts has gone through a “first fruit, and later becauseof”path： the local government debt in the relevant laws and regulations, such asthe“Budget Law”, is the event of non-compliance;However,the use of local governmentborrowing and debt funds is everywhere, The accumulated and hidden risks are less likelyto be ignored. So it’s increasingly urgent to build systems. The research on localgovernment debt management has both theoretical and practical, both short-term andlong-term multiple meanings. It’s not only the need of financial capital’s meticulousmanagement, but also the cross use of different disciplines, such as economics,management and so on. I t can not only effectively regulate and guide the conduct of localgovernment borrowing, but also force other reforms of the government’s fiscal capacitybuilding.Based on the experience of foreign debt management, this paper stands on thepractical requirements of China’s basic national conditions and China’s local governmentfinance capital management. Besides it chooses the micro perspective:”the system”tocomplete our.According to the theory of institutional change and the realistic requirementof financial capital management in local governments，this paper proposes that the localgovernment debt institution should be formulated by provincial government and theexecutive detailed rules should be made by government below the provincial level. Thispaper also designs content framework of the provincial government debt managementinstitution，aiming at providing guidance which can manage the local government debtbehavior effectively．This paper is divided into six parts:The first part proposes constructing a multilevel nature of vertical and contentintegrity of horizontal system based on the diversity and complexity of local governmentdebt. Because of the lack of existing debt management system, this paper stress on thenecessary and urgent. After reviewing of the current research and drawing on the essence,analying the insufficiency, this paper introduces the topic.The second part describes the theoretical basis. In the path selection, this paper isbased on the new institutional economics and the theory of institutional change. Itproposes that the process of improvement of the system is progressive. In the content,according to new public management and public sector financial management theory, thispaper proposes to regulate local debts starting from the micro perspective and the contextof capital flows and clues.The third part, we use empirical research methods to find unresolved issues. Afteranalyzing samples of the existing system, this paper indicates that the substance of localdebt management system construction can divided into two parts: the level and thecontent.The fourth part describes the four typical debt management modes, re-emphasizelocal government debt management system should be absorbing and local conditions. The fifth part designs the overall system builds and the content. It proposes that: thelocal government debt institution should be formulated by provincial government and theexecutive detailed rules should be made by government below the provincial level. Forcontent, it should include funds borrowing, using up, repaying, organization, supervision,information systems and financial performance evaluation system.The sixth part describes the research findings and the limitations of this paper. Itproposes that the follow-up studies can be expanded from the following aspects: buildingdebt management rules for below the provincial; researching on the application of theprovincial government’s practice; designing different debt management system for variousdebts; the integrity of the design of budget management, government accounting andinternal control systems.