A Study On Effects Of Transfer Payment To Western National Region Economic Growth

The real transfer payment system is established after the tax reform in 1994. As an important part of the fiscal decentralization system, it can adjust to the imbalance of regional economic development, promoting the rapid economic growth in backward areas, which can ensure the balanced development of regional economy.Western ethnic regions is the main gathering place of the minority nationality in China,and also with the special geographical location, the central government has devoted a large number of transfer payment in the western minority areas. At the same time, the economy of western minority region has achieved rapid development with the continuous advance of west exploitation.Therefore, a deep insight into the relevance between the transfer payment of the central government and the economic growth in the western ethnic areas, examining whether the central government's transfer payment system to the western minority regions is effective, have the vital significance.On the basis of previous research results, this paper makes a preliminary study on the effect of transfer payment to the economic growth of the western minority areas.It mainly includes the following parts:the first part discusses the core concepts of the western minority areas and the transfer payment, combing the relevant theoretical basis, which lays the theoretical foundation for the following research, and it also analyses the mechanism of transfer payment on economic growth.In second part, we analyse the actuality of the western financial transfer payment and economic growth in these areas, mainly describing the scale and structure of the transfer payment and the total amount of economic growth, and finally analysing synthetically of the transfer payments in western ethnic areas of transfer payment and its economicgrowth.In the third part, the paper makes a quantitative analysis on the effect of transfer payment on the economic growth of the western minority regions. We use the panel data of eight provinces from 2014 to 1995 in the western region of China,constructing panel threshold model.Results show that there is nonlinear threshold effect in transfer payment of central government to economic growth, when the proportion of transfer payment is lower than the first threshold value 0.546, increasing transfer payment can promote economic growth, but it does not reach the best effect;when the proportion of transfer payment between 0.546 and 0.571, the effect of transfer payment on economic growth is biggest; But when the proportion of transfer payment between is higher than 0.571, the transfer payments that the central gave to the local will hinder economic growth. Finally, according to the empirical research,we put forward the corresponding countermeasure proposals on improving the system of transfer payment and contributing to rapid economic growth promote the rapid economic growth in the ethnic area of Western China.