The Issue Of Local Government Debt Management

Since2008, in order to cope with the international financial crisis, the central has issued a series of economic stimulus plans. But these expansionary policies lead to the growing of local government debt. Although the debt of local government plays a positive role in promoting the economic development and providing the public goods, but with the enlargement of the local debt, how to manage the local government debt effectively becomes an issue. How to manage the local government debt effectively is about controlling the scale of the local debt, managing the local debt effectively in the aspects of borrowing、using and repaying. Managing the local government debt effectively can make the local debt play a positive role in promoting economic development and constructing local utilities. On the contrary, if not, the huge debt and the repayment burden will become the uncertainty factor of the operation of the macro economic and social stability. The research about the management of the local government debt will promote the theory of the local government debt, and will provide a reference for the government and the financial sector to make decisions about how to manage the local debt effectively. So the research of the management of the local government debt is meaningful to theory and to practice.On the basis of the literature at home and abroad and the quantitative analysis, we can offer some proposals about how to manage the local government debt effectively after the research of current situations and problems of the local debt. Besides the large scale of the local debt, the management of the local debt also have many problems, such as the chaos of the debt principal、the unreasonable use of the local debt capital、the lack of repayment mechanism and supervision and so on. Focusing on these problems, we analyzed the reasons from different views like the matching of financial power and the authority of office、the defining of the debt principal、the informing of the local debt information、the constructing of the laws and regulations. Then we referenced the successful experiences of local debt management mode from the foreign counties such as Canada、the United States、Australia and Japan. Finally, we put forward the ways to strengthen the management of the local government debt. It is reforming the fiscal systems giving the local government the rights about issuing debt、increasing the service efficiency of capital、setting up the mechanism of debt repayment、improving the supervision system of the local debt、establishing a warning system of the local debt.