The Study On The Efficiency Of Local Government Debt Expenditure In China

Since Chinese government operated System of tax allocation reform in 1994,debt of local government has experienced a rapid process of accumulation.After the global sovereign-debt crisis broke,China's huge local government debt has caused wide public concern,international and domestic academics studied formation mechanism,transmission mechanism,risk rating,management system of debt of local government.But the research focuses on the expenditure efficiency of local government debt is very few.This paper,on the basis of the predecessors,built the expenditure efficiency appraisal system of local government debt,using the three stage DEA and super efficiency DEA model to evaluate the expenditure efficiency of our country's provinces and cities in 2012,and carries on the comprehensive evaluation on spending efficiency of these regions combining with clustering analysis.In this paper,empirical research conclusion is as follows.First,after eliminating the influence of environment variables,the efficiency significantly increase,and the pure technical efficiency is lower than scale efficiency.Second,over half of the regions are at the diminishing returns of scale stage,namely the debt scale of these regions is oversize.Third,after the adjustment,the west regions' efficiency is the highest,the middle regions' efficiency is the lowest,the pure technical efficiency of the middle regions is more susceptible by environment,the scale efficiency of the east regions is more susceptible by environment.Finally,the study using the cluster analysis to analyze the spending efficiency of local government debt shows that these regions' spending efficiency of government debt is divided four groups:”double high”,”low-high”,”high-low”,”double low”,the first group consists of only five regions,most regions belong to the third or fourth group.The empirical study shows that there is the optimized space about the spending efficiency of local government debt.Improving the external environment,reasonably controlling the scale of debt,improving the management ability of thegovernment debt can effectively improve the spending efficiency of debtThere are some policy advise: strictly implementing the revised "budget law",enhance the budget management of local government debt and scale control;strengthening the supervision of government debt,establishing the performance evaluation system of government debt;improving the transparency of government debt,promoting the PPP cooperation mode;deepening reform of the financial system,perfecting the accountability of the government officials.