Does The Land Finance Promote Official Corruption?

Since entering twenty-first Century,China is experiencing the rapid development of economy,people can clearly feel the great changes brought by China's economic development.However,as the exercise of people's rights,local government officials may have a series of abuse of rights such as corruption and bribery.In particular,since The 18 th National Congress of the CPC,the central government has strengthened the governance of corruption in officials,and a variety of corruption problems have been released to the public,and many cases are startling.China has a long history of land finance.The main reason for this is that the current financial system makes it difficult for the local government to obtain adequate income from the system to maintain the government's exercise of its rights.The current financial system was formed on the basis of the tax system in 1994.As a tax system with a clear tendency of centralization,the reform of the tax system directly led to a sharp decline in the local initial distribution of financial resources.From the point of view of fiscal revenue,local fiscal revenue in the proportion of total revenue from 78% in 1993 dropped to 44.3% in 1994,and it keeps fluctuating below 50%.Correspondingly,after the reform of the tax sharing system,the proportion of local fiscal expenditure to total financial expenditure has been maintained at about 70%,and gradually increased since 2000.Therefore,the tax sharing reform has led to a nearly 30% gap between the revenue and expenditure of the local government.Although the tax sharing system is only a division of the financial and expenditure responsibilities between the central and the province,it has a great impact on the establishment of the financial system below the province.Under the tax sharing system,the local government is difficult to meet the government's financial expenditure by relying on its own formal financial income and the transfer payment of the higher government.Faced with such a problem,the local government is looking for a way to get a reasonable financial revenue to make up for the lack of budgetary revenues.On the one hand,local governments continue to include all kinds of informal fiscal revenues including land fees as sources of government funding.On the other hand,the income tax sharing reform made in 2002 has greatly changed the way of local government revenue acquisition.because in the current tax system arrangement,value-added tax and income tax are shared by the central and local government,and central government share a large proportion of the tax.Besides,consumption tax revenue is fully owned by the central,thus local government is difficult to increase their income through the development of industry to obtain the value-added tax and income tax revenue.Therefore,the local government will be able to obtain all the revenue for the local government through the development of the third industry,including the construction industry,and this phenomenon is becoming more and more logical.Therefore,both the extra budgetary revenue and extra institutional revenue actively pursued by local governments,or the sales tax revenues which local governments rely heavily on,play a very important role in land finance.Zhou Lian(2007)first proposed the governance mode of Chinese local officials--Promotion Championships and trying to reveal the relationship between this specific official governance mode and China's rapid economic growth and various problems.The research on institutional economics of Chinese officials' governance is mushrooming.Considering the local government as the supply monopolist in the land market,the exercise of rights may be lack of supervision from outside,so it is possible to promote corruption of officials.And since The 18 th National Congress of the CPC,the government has vigorously promoted anti-corruption and strengthened the supervision of government officials,and the corruption cases in the real estate field have come into being.Therefore,it has prompted us to consider whether the government's land finance system has promoted corruption of officials.The main purpose of this article is to investigate whether the land finance has promoted the corrupt behavior of officials.First of all,institutional economics for promotion of officials and corruption of the domestic and foreign literature was combed.Second,we have made a thorough study and discussion about "what is corruption" and the measurement of corruption in the academic circle,and also made a relevant explanation for the measurement of the land finance.Third,we analyze the influence mechanism of land finance on official corruption from the shortage of land financial mechanism of local governments.Finally,We use spatial econometric model to do empirical research on land finance and official corruption.On the basis of the research methods of other scholars in the academic field,we collect and utilize the Chinese land financial data,corruption data and other provincial panel economic data,and we study the relationship between land finance and corruption through the methods of spatial econometrics and use the spatial generalized moment estimation method(SPGMM)to overcome the endogenous problem between land finance and official corruption.The results show that the land finance has indeed promoted the corrupt behavior of local officials to a certain extent.In addition,we try to test whether official corruption has a spatial spillover effect through the methods of spatial econometrics,that is,whether local corruption has an impact on corruption in other areas,but our empirical analysis is not the same as the results of Chen(2013)and Qi(2017).There is no obvious spillover effect on corruption behavior of officials in the province level.