Research On The Management Of Township Debts

The township government debt problem has been one of the hot topics of the academic world these years. In December 2013, China’s National Audit Office issued an audit report of government debt in our country, which shows that as the most basic unit government in our country, the township government’s debts have been quite severe both in amount, growth rate and repayment pressure. If these problems couldn’t be solved properly, the township debt crisis would be caused, which will affect the stability and development of basic government, and affect the whole country’s stability ultimately.This text explains the reasons of township government debt by principal-agent theory. There are interest conflicts and information asymmetry in the principal-agent activities between township government and superior government, township government and local people, township government and creditors, which cause township government debt. Because it needs a long time to eliminate township government debt, and the influences of township government debt have two sides, so we must manage the debts scientifically firstly, and let the debts to play a role in promoting the economic development. And in the same time, the debt risk could be kept away.This text chose B town in Yu Yao city as a study case, and introduces the basic debt situation. It also introduces the practices in debt management of local governments and the shortcomings which need to be improved. Because of the lagging laws, the incomplete budget systems, the vague risk alarm system, the not in place accountability system and the incomplete, there are shortcomings in the township debt management, such as out of line activities, the debt money out of the budget management, high government debt risks, information asymmetry, monitoring bugs and vague debt management institutions. The text introduces the experiences of local government debt management in American, Japan and Columbia. And in the same time, it also introduces the experiences of Jiao Zuo city and Wen Ling city. We got revelations in legal debt rights, debt money management and debt risk prevention, and then supply suggestions in building township government debt management system. To build the system, the legal debt rights and scientific classification method are the premises. The system includes four parts, which are approving system, debt money management system, debt risk controlling system and performance appraisal system. The text then explains the four parts particularly.