Analysis On Local Government Fiscal Social Security Expenditure Efficiency

Since reform and opening up, China’s economic strength and international competitiveness has been significantly increased. But the level of social security in China is long-term low. Social security expenditure is lack of efficiency. Local government is the "main force" of fiscal social security expenditures and has advantages in understanding of the public goods preferences of local residents. So the fiscal social security expenditure efficiency of local government is particularly important. In this context, the study of local government fiscal social security expenditure efficiency has a certain practical significance and theoretical significance.This article firstly describes the present situation of the local government’s fiscal social security expenditures in China. On the basis of public goods theory, the theory of pareto efficiency, and the public choice theory, the empirical analysis is carried out on the efficiency of local government spending on social security.In the basis of China’s 26 provinces and cities in 2007 to2013 panel data of input and output of the local government’s fiscal social security expenditures this paper uses DEA model and Malmquist index systems to have static and dynamic analysis in local government’s fiscal social security expenditures.And then Tobit regression model is used to study the factors that influence efficiency of local government spending on social security. It finds that local government fiscal social security expenditure efficiency has obvious differences between different provinces and between different areas. During the period of 2007 to 2013, the local government fiscal social security expenditure efficiency as a whole has relatively weak decline trend. The lack of technical progress, the low scale efficiency and the lack of improvement of pure technical efficiency are the main internal cause of the decline trend of local government public expenditures efficiency. The per capita GDP, population scale, the dependency ratio has negative influence on the local governments’ fiscal social security expenditure efficiency. Illiteracy ratio, the government scale, the fiscal expenditure decentralization and fiscal revenue decentralization has positive influence on the local governments’ fiscal social security expenditure efficiency. Finally, policy suggestions are put forward.