Analysis On Shandong Province Municipal Governments’ Investment Efficiency

Government investment is the main force which drives social and economic development, and improves public infrastructure construction and living standard of citizens. At present, as the dominant force in the investment structure in China, government investment is leading other investments. The efficiency of government investment is an important indicator for evaluating the performance of government in facilitating regional economic development and improving public infrastructure with its resources. However, in comparing with qualitative analyses, relatively fewer quantitative analyses on government investment efficiency have been conducted nowadays. Furthermore, most of the quantitative analyses on the investment efficiency of local governments were based on data before 2008, from perspective of macro level rather than intermediate or micro level. Those quantitative analyses typically evaluated the investment efficiency of local government from perspective of economic efficiency, and ignored the social efficiency. The investment efficiency of governments in each level is an important indicator for judging whether the economic development of Shandong is healthy. This paper has evaluated the investment efficiency of governments in Shandong from three aspects: economic efficiency, social efficiency and overall efficiency. Related data of investment made by municipal governments in Shandong from 2003 to 2013 has been collected, and weighed with G1 method. Then standardize those data by nondimensionalization to reduce the dimensionality. Based on super-efficiency DEA model, the economic efficiency, social efficiency and overall efficiency of each municipal government had been calculated and ranked. Moreover, linear-regression analysis for the economic efficiency, social efficiency and overall efficiency of investment made by municipal governments in Shandong had been conducted based on multiple linear regression method. Here comes the result: from 2003 to 2013, the economic efficiency, social efficiency and overall efficiency of investment made by municipal governments in Shandong, to certain extent, had been declining. In spite that the central government released investment stimulus of 4 trillions in 2009, the investment efficiency of each municipal government in Shandong had declined in different degree since 2011. Many cities only paid attentions to economic development, and ignored the social development. Therefore, it led to a dead end of high investment, high consumption and resource-wasting that relying on high investment to obtain fast social and economic development without caring about the balance between economic development and social development, as well the improvement of government investment efficiency.Based on empirical results, this paper analyzed reasons for the decline of economic efficiency, social efficiency and overall efficiency of investment made by municipal governments in Shandong, as well as the great differences of investment efficiency among different municipal governments, from aspects such as decision-making and supervision mechanism, resource utilization, government investment structure, etc. Based on preceding reasons, this paper proposed measures to improve government investment efficiency from various aspects such as perfecting decision-making and supervision mechanism for government investment, perfecting internal supervision, improving resource utilization, optimizing government investment structure, reasonably identifying government investment scope, harmoniously developing economy and society, etc.