The Research On The Comparison And Norm Of The Fiscal Competition Among Local Governments In China And Western Countries

In recent years, the fiscal competition among local governments is becoming the focus of academic research. In Western countries, the local government has a relatively independent economic interests and financial autonomy, which enables the local governments to have the ability of the fiscal competition to attract enterprises or residents who are the sources of tax revenue, such as taking more tax preference than somewhere else to lower the operating costs of the enterprises or residents, or providing public goods and public services to improve the local investment environment. The fiscal competition among local governments comes from the reform of the tax system in 1994, whichmade our country local government in our country have the relatively independent economic interests and the relatively independent allocation of resources authority, which provided conditions for fiscal competition among local governments in China. With the right of property rising gradually while powers delegated gradually, the fiscal competition among local governments is the inevitable result.The current studies on fiscal competition among local governments in China, select one angle, tax competition or public expenditure competition, combined less with the advanced experience of regulating the fiscal competition among local governments in the foreign developed country, which make the corresponding standards proposed unconvincing. Because either federal countries or unitary countries implement fiscal federalism, namely decentralization of fiscal system, their experience will provide the reference. This paper intends to select the United States, Germany, Japan, from comparative perspective between China and abroad, taking comparative analysis of the fiscal competition and standards among the local government between domestic and foreign countries, and ultimately propose Corresponding policy recommendations, to make the fiscal competition among local governments improve the national welfare.By comparison, we can find that the patterns of fiscal competition's manifestation in the United States, Germany, Japan, and China are very similar, not only the means but also the process, whose attention is transformed from the initial tax competition to both tax competition and fiscal expenditure, aimed at improving investors' investment environment and living environment for attracting outside investors(tax base) settling locally. To this end, the United States, Germany and Japan also paid a painful price for fiscal competition, because of their lessons, it's necessary to look for more reasonable norms to constrain fiscal competition among local governments, but it's not denied that the Western countries reflect the advantage of the fiscal competition among local governments, we should objectivelyrecognize that many methods the Western government departments take for servicing economic development are more enlightened and thoughtful, so we can learn from the analysis and summary of their fiscal competition among local governments, to bring up some suggestions to regulate the fiscal competition among local governments.The first is the division of property rights and powers. Define governments' roles and power, which means a clear division between the government and the market and all levels of governments' responsibilities. And define governments' property rights clearly to match the governments' power, such as determining the local main taxes, regulating tax preference and tax collection. The second is the transfer payment system-- a disguised form of fiscal competition. Lay the transfer payment system's emphasis on "equalization" of basic public services, speed up the research of horizontal transfer payment, strengthen the standardized management of transfer payments, and strengthen financial information's communication between local governments, construct coordination mechanism between the interests of local governments. The third is the comprehensive, scientific local government performance evaluation mechanism, which requires not only redefining the local government performance evaluation index, studying index reflecting social welfare of the residents such as green GDP, but also improving the organizational system of government performance evaluation mechanism gradually. The fourth is promoting the reform of the government budget to strengthen its supervision on fiscal competition in a meticulous and deepgoing way, and strengthening public supervision of government action to improve the social supervision mechanism gradually. The fifth is improving the legal system to promote healthy fiscal competition based on the overall objective of the rule by law, which is to constrain government action, for the benefit of society.In general, the innovation of this paper is to use the methodof comparative analysis, through the comparison in local governments' fiscal competition between the United States, Germany,Japan and China, which can analyzecomprehensivelythe reasons of foreign government regulation of fiscal competition, and puts forward some reasonable policy recommendations for China's fiscal competition. On the basis of supplementing previous studies, do a little contribution to improve our fiscal performance.