Research On Fiscal Risk Of Gansu Local Government Debt

The Reform of Tax Distribution in 1994 had clearly divided the financial power between central and local governments.However,the relevant administrative power was not scientifically and reasonably divided.In recent years,with the fast development of economy,society and urbanization,the local government has more and more public service responsibility on people's livelihood guarantee,ecological protection,society development and infrastructure construction,etc.Therefore,the rigid financial expenditure is growing,and the contradiction of financial and administrative power mismatching become prominent.At the same time,the government official performance appraisal system excessively concern with GDP increase,but has a weak constraint on local government's debt size.Under the pressure of keeping stable development and GDP increase,the head of the local government tend to chose leap-forward development via excessive debt size.In the year 2008,in order to cope with international financial crisis,the central government took Ten Measures of Expand the Domestic Demand and Guarantee the Growth,which even motivated the local government to enlarge their debt size.Each local government borrows more loans in disguised form through establishing financing platform,which made the debt risk of local government increase.From the status quo of Gansu Province,though the size of local government debt is relatively small,there are still risks and problems,such as weak awareness of risk prevention,non-standardized get and use of funds.Therefore,it is very urgent and necessary to analyze current status of local government debt and possible fiscal risk,and exploit efficient path of strengthening management of local government debt risk.This essay takes the theory of public finance,public choice and risk management as the guide,targets at the fiscal risk of local government debt,analyzes the size,structure and problem of Gansu local government debt by researching the result of study at home and abroad.After that the author uses conventional index analytical method to evaluate the fiscal risk of Gansu local government debt,summarizes the different kinds of realistic performance of fiscal risk,and objectively analyze the causes of risk.At last,the author proposed solutions to government debt risk management by learning from successful experience abroad and combining with the realistic conditions of Gansu.