Research On Mechanism Of The Local Government Debt In Underdeveloped Regions

The government debt is a common problem among the countries of the world. Only by handling it successfully can it guarantee the safety of financial system and stability of macro economy. So it is highly necessary to establish a scientific repayment mechanism to solve the dilemma. Underdeveloped regions in our country, however, are threatened easily by debt risk with their limited financial resources and poor repayment ability. By taking the underdeveloped regions as examples and due to the small scale of debt and relative simple structure in debts, as a result, it is helpful to solve the problematic and practical issues in these regions and also can offer more lessons to the expanding developed regions. Two kinds of methodologies are adopted, text study and data analysis, to improve the repayment ability of underdeveloped regions. By adopting the former methodology can work out a feasible model for the problem of local government debt after researching related financial policy and management and analyzing the reasons and willingness of the local governments. By adopting the latter one, taking D city as an example, can produce an efficient mechanism to handle the local government debt by comparing the advantage and disadvantage between national data and local data. Then based on the structure of bond frame of underdeveloped regions, the mechanism above could offer positive suggestions for local government to solve the debt problem with the improvement of the repayment policy and a standard of repayment scale.