A Study On The Impact Of Transfer Payment On Fiscal Expenditure Behavior Of Poor Counties In Anhui

The 18th National Congress of Communist Party of China has clearly called for the full realization of a well-off society in 2020,and to achieve this great goal,the key lies in that whether the poor counties can successfully eliminate poverty and step into the well-off society.If the poverty-stricken areas do not fully meet the well-off level,China cannot not be the real well-off society.However,due to severe natural environment,poor economic development base,and highly limited local fiscal revenue,poor counties cannot rely solely on their own strength to improve the supply of public services and living standards of residents.They have to be dependent on the large amount of transfer payment from the governments of higher level.In order to help poor counties to get rid of poverty quickly,national government has set up the national key county of poverty-alleviation,and key county of poverty-alleviation in a succession of continuous poverty-stricken regions.Anhui Province has also set up a provincial key county of poverty-alleviation.The poor counties are entitled to the transfer payment from governments of higher level.However,after the poor counties have received the substantial transfer payment,the local governments make less efforts to improve revenue,and even deliberately reduce their work so as to obtain more transfer payment by making them poorer A large number of transfer payments are used to maintain the operation of bulky government agencies and in the economic construction which can improve the performance of the officials.The willing to enhance the basic public service is the least enthusiastic.Therefore,it is necessary to study the financial expenditure in poor county and find out whether the current transfer payment system worsens or relieves the distorted financial expenditure in poor counties.Otherwise,no matter how the central authority expands the scale of transfer payments,its performance is still limited,and poor areas still cannot achieve the goal to alleviate the poyerty.This paper is divided into five parts.The first part is the introduction,including the purpose and significance of this paper,research status at home and abroad,research ideas and framework.The second part introduces the concept of transfer payment at first,and then explains the mechanism of transfer payment affecting the scale and structure of financial expenditure.Finally,it offers the involved theory.The third part analyzes the current situation of transfer payment and financial expenditure of poor counties in Anhui Province:firstly,it analyzes the scale and structure of the transfer payments of poor counties in Anhui Province,and then analyzes the scale and structure of the financial expenditure of poor counties in Anhui Province.The fourth part uses the empirical analysis method to study the influence transfer payments impose on the total amount and structure of the financial expenditure of the poor counties in Anhui Province.Firstly,based on the dynamic panel data model,the influence of net transfer payment and the total transfer payment of various kinds on the scale of financial expenditure is studied,which proves the existence of the Flypaper Effect,that is,compared with the self-owned local fiscal revenue,the transfer payment can better promote government of poor county to increase the scale of financial expenditure.At the same time based on Chinese financial system,the reason for the existence of the Flypaper Effect is analyzed.Then the dynamic panel data model is used continually to study the influence of net transfer payment and the total transfer payment of various kinds on the structure of financial expenditure.It is concluded that under the current financial transfer payment system below the provincial level in Anhui Province,transfer payment not only fails to effectively improve the irrational financial expenditure of poor county,but,to a certain extent,exacerbates the distorted structure of financial expenditure.Then,according to the conclusion of the study,policy suggestion is proposed in two aspects,namely,to improve the fiscal decentralization system and the transfer payment system below the provincial level:first,fiscal decentralization system should be optimized,including reasonable designation of county-level financial power and proper expansion of its financial power;secondly,financial transfer payment system below the provincial level in Anhui Province should be improved,including reasonably determining the scale of financial transfer payment below the provincial level in Anhui Province,optimizing its financial transfer payment structure,improving its method to allocate the transfer payment,accelerating the legal system construction of transfer payment,and stepping up the supervision on financial transfer payment funds.