The Research On Equalization Effect Of Fujian Province-to-country Financial Transfer Payment

Financial transfer payment originated in the UK, this system used as a macro-economic policy is widely used in Western countries. Chinese fiscal transfer payment system began in 1994, when the tax sharing system reform happened. At present, China has initially formed a relatively standardized central to the provincial government’s fiscal transfer payment system, transfer payments scale is also increasing. But provincial fiscal transfer payment system is still at exploratory stage. Several center reports repeatedly propose to focus on the equalization of basic public services and the construction of the main functional areas, improving the transfer payment system, in particular the increase of general transfer payments balance and the ratio of reduced and standardize special transfer payments.Firstly, on the basis of the financial transfer payment related concepts and theories, this paper analysis the status of Fujian’s province-to-country financial transfer payment, including the historical evolution of the financial system and financial transfer payment in Fujian province, and the current system and scale of Fujian’s province-to-country financial transfer payment.Secondly, on the based of 2000-2012 statistical data in Fujian’s province, this paper uses the coefficient of variation method and Gini coefficient method to research the equalization effect of Fujian’s province-to-country financial transfer payment and get the following conclusions. The first conclusion:the financial transfer payment played an important role in longitudinal adjustment, alleviating the financial pressure on the county level to some extent. The second conclusion:the lateral equalization effect is limited, in which financial transfer payments equalization is better, tax payments’equalization is the worst effects and special transfer payments" equalization effect is centered. The third conclusion, known by the panel regression model estimates, the county in Fujian Province level fiscal transfer payment system design is lack of standardization and effectiveness indeed.Finally, This paper analyzes the problems and causes of inequality of Fujian’s province-to-country financial transfer payment, and then proposes optimization programs.Empirical analysis shows that an important reason for the poor fiscal transfer payments equalization of Fujian Province to county is the lack of standardized and effective fiscal transfer payment system. In addition, there are the following deeper reasons:unreasonable division of financial authority and powers, incentive restraint mechanisms and monitoring systems, the lack of standardized legal system, and so on. To solve these problems, we propose the following optimization program. Firstly, improving the local fiscal system and keeping reasonable transfer payments scale. Secondly, standardizing transfer payment system and optimizing the structure of transfer payment. Thirdly, establishing incentive and supervisory mechanisms to improve the efficiency of the transfer funds. At last, improving laws and regulations to security system of transfer payments.