The Efficiency Of Transfer Payment Analysis

The Transfer Payment System, initiated by central government, serves as animportant means of regulating and distributing regional financial resources, as well asthe main policy in the adjustment of regional economy. In1994,our country carriedout the reform of tax system.From then on,the Transfer Payment System has beenimplemented by the Chinese central government. So far,This system has beenimplemented for nearly twenty years.It is undeniably that transfer payments increasedthe resources obviously and improved the level of the public service to those certainareas.However,we have clearly ideas that this system whether could boost theeconomy,in other words,the efficiency of transfer payment has been discussed.According to the literature collected,a great of people held the ideas that transferpayment system has been a big frame,this is to say, we have had no specificmeasures.As a result,funds from central government lack of supervision.the localgovernment use the funds in a casual way.So transfer payment system has neverachieved the goal.But others held the opposite views.This paper take eight provinces and autonomous regions of ethnic minorities asthe research objects,Based on the data collected from the Statistical Yearbook andlocal Yearbook.At first,The per capital income should be analyzed before and aftertransfer payment system.According to those figures,by contrast,we can knew that theper capital income had been improved greatly.And then,I analyze the level of capitalincome from transverse to longitudinal. Analysis shows that the gap has narrowedcompare to national level,as well as compare to other provinces.At last,this essayempirically analyzes the effects and benefits of the central government’s TransferPayment System on the provinces and autonomous regions of ethnic minorities bysetting up a panel data model. The results show that even if there’s no obvious effectin short term, it does reap benefits in the long run.To establish a perfectly and reasonable transfer system,and to promote thedevelop of the regional economy,based on the the actual situation,the paper putforward to some suggestions on the policies aiming at optimizing the TransferPayment System and further enhancing development based on the actual situation ofincome inequality.