| The author thinks that the weak budget control of China is an important reason of the formation of local government debt crisis. This research, based on inverted soft budget constraint theory, starting from the perspective of budget control, analyzes the government behavior of the micro level and the institutional incentives of Chinese budget constraint failure to control local government debt from the point of current local government budget constraints “top-down†breakthrough phenomenon.Firstly, the thesis analyzes the local government debt and financial control function of budget. The thesis thinks that there are inverted soft budget constraint phenomena in China, for example arbitrary charges and fines, land finance, government borrowing. Secondly, the thesis analyzes the formation and performance of the inverted soft budget constraint from the failure of government budget control. The thesis thinks that the reasons of budget control failure and government debt crisis are the low budget transparency, the lack of effective information disclosure, the unreasonable budget process, the extensive data review, and the lack of institutionalization of bottom-up budget supervision mechanism. Finally, the thesis proposes that the countermeasures of strengthening Chinese local government budget constraint are to apply accrual accounting, normalize the budget procedures, and play the supervision role of the National People’s Congress.Government budget has important financial control functions, and is an important means of restraint of government power. China needs to control government expenditure and scope of activities through budget to improve the government administration efficiency and management quality. It can control local government borrowing behaviors, reduce the financial risks, and guide the national politics to a more stable direction to improve the China budget system and supervise the government operations through budget. |
