Research On Efficiency Of China Local Finance Expenditure Based On Data Envelopment Analysis

The financial revenue and financial expenditure are two important means for the government to achieve its functions and the allocation of resources. Since reform and opening up, the economic development continuous and rapidly in our country, financial revenue increase significantly and financial expenditure grows as well. Since 1994, financial expenditure shows share of GDP from 12% to 24.6% in 2013. Reasonable and effective fiscal expenditure policy is conducive to the transformation of economic growth mode, the rational allocation of resources, realization of governmental functions and achieving a fair and harmonious society. However, whether the structure of financial expenditure is reasonable, whether the expenditure scale is appropriate, and whether the expenditure performance is efficiency are still growing concern for the people. Therefore, the government departments should pay more attention to the financial expenditure on the effect, namely the use of financial expenditure performance. This paper use data envelopment analysis(DEA) to analyze and evaluate the expenditure of the financial funds from 2007 to 2013. This analysis includes the technical efficiency, pure technical efficiency, scale efficiency analysis and returns to scale. Compared the provincial government spending efficiency, we can optimize the efficient use of funds paid by the central government transferred to the provinces, reasonable funds configure, and promote the equalization of basic public services.First, elaborate the research background and significance of local government financial expenditure performance in China, review and analysis the local government financial expenditure performance in domestic and foreign, introduced the research contents and research method and the innovation of this article. Second, the theoretical foundation of the provincial public finance expenditure performance is introduced, including the principal-agent theory, new public management theory and the theory of financial expenditure efficiency. Third, to empirical research of financial expenditure performance, it is concluded that most of provinces’ financial expenditure performance is not high. Forth, emphatically analyzes the causes of financial expenditure performance not high. Finally puts forward some methods to improve the financial expenditure efficiencies with targeted: to establish and perfect the system of local financial expenditure performance evaluation; to establish perfect social supervision mechanism; set up scientific mechanism of public decision-making; establish an effective incentive mechanism of government departments and officials; optimize the of financial expenditure structure, reform the government functions.