A Study Of Efficiency Evaluation And Optimal Regulation Of Local Government Debt Scale

The increase of local government debt and the following pressure of local government debt risk will inevitably affect the economic development of local regions,so it is meaningful and important to study the efficiency of local government debt scale and the method of optimized regulation.With the local government debt scale as its studying target and analysis of local government debt and scale efficiency as its base and guided by preference matching standards of public demand,this paper develops the demand function to calculate the local government debt scale and compares it with the actual local government debt scale so as to design preference matching index of debt demand to be performance evaluation index for local government debt scale,and conducts empirical assessments of performance of local government debt scale at the macro-level by analyzing panel data of correlated samples collected from 2002 to 2014 in thirty-one provinces in China.Two results appear.In terms of space distribution,the proportion of high efficiency of local government debt scale in eastern regions is larger,while that in western regions is smaller.In terms of time distribution,from 2002 to 2007,the number of provinces with high efficiency of balanced local government debt scale is increasing,while from 2008 to 2014,the number remains stable,especially after 2012.Based on the objective analysis of the efficiency of local government debt scale in provinces,this paper further categorizes the influencing factors of performance of local government debt scale into fiscal decentralization,promotion incentives and budget soft constraints from the perspective of local government behaviors;it employs multivariate options Logit model to empirically examine the influencing mechanism of performance of local government debt scale.The empirical results indicate that the institutional environment for Chinese fiscal decentralization,promotion incentives and budget soft constraints faced by local government debts jointly and significantly influences the performance situation and level of local government debt scale.Hence,this paper proposes several policy suggestions,such as reforming the institutional environment for fiscal decentralization and adjusting institutional arrangement of incentive and constraint mechanisms for local government debt,so as to regulate performance of local government debt scale in China in an optimal way.