An Analysis Of The Relationship Between Fiscal Decentralization And Economic Growth In China

At present,there have been many analyses on the relationship between fiscal decentralization and economic growth,but the results are different.Among them,the majority of studies show that fiscal decentralization has a positive effect on economic growth.However,from the whole process of China's economic system,the change of fiscal decentralization system and the market-oriented reform is highly coincident in the schedule.And the governmenand market allocation of public and private resources.Based on the analysis,The author combines the fiscal decentralization system to the market reform of two important institutional arrangements,and then reveal the economic growth effect of China's fiscal decentralization.This paper focuses on the effect of fiscal decentralization on economic growth.This article is divided into five parts.Introduction.It mainly includes the background and significance of the article,the literature review,the main content and the methods,the innovation and insufficiency.The article sorts out the existing literature from various angles,and summarizes the direction of further efforts and the focus of this paper.Chapter1,the definition of related concepts and basic theory.It focuses on the three core concepts:fiscal decentralization,marketization and economic growth,and explains the relationship among fiscal decentralization,the market reform and economic growth.Chapter 2: China's financial system changes and market-oriented reform process.Based on the historical retrospective,this paper analysis the history and current situation of the process of fiscal decentralization and the marketization process comprehensively,and proposes a hypothesis : The relationship between China's fiscal decentralization and regional economic growth shows "non-linear" feature.Chapter 3: An Empirical Analysis of the Impact of Fiscal Decentralization on China's Economic Growth.In this part,based on the panel data of 30 provinces in China,the author builds two models to carry out the regression: a basic model and a threshold panel model,its conclution verifies the previous assumptions.Chapter 4,Policy Recommendations.It explains the two relations: First,the relationship between government and the market;Second,the fiscal relationship between the central and local.The innovation of this paper has two aspects.First,the theoretical aspect.Based on the theory of institutional change,this paper combines the fiscal decentralization system and the marketization system,and analyzes the synergistic effect on the economy growth.In the aspect of empirical method,the article constructs the basic model which includes the cross multiplication terms of fiscal decentralization and marketization,and a threshold panel model in which the degree of marketization is used as a threshold variable to carry out the empirical regression.The results shows the effect of fiscal decentralization on economic growth exists a significant threshold effect,research methods and conclusions are novel.Through the theoretical and empirical analysis,the article shows that China's fiscal decentralization and regional economic growth is not a simple linear relationship,with the deepening of the process of marketization,it shows non-Linear characteristics.The effect of economic growth on the decentralization of China's expenditure is characterized by positive and negative changes,and the decentralization of income is positive effect,but it has weakened with the acceleration of the marketization process.The conclusion can help us to understand the fiscal decentralization system effect deeply.The conclusions of this paper are favorable for China's fiscal decentralization reform and market-oriented reform,and help the economy achieve long-term and healthy development.