Study Of Effect Of Participatory Budgeting On Financial Expenditure Structure And Transparency Of Local Government

According to the theory of "promotion championship",political promotion incentives enable local governments and officials to vigorously develop their economy in order to win the "promotion championship",which provides an important impetus for the rapid development of China's economy in the past 30 years,and accordingly,the financial capacity of our government has been greatly improved.However,what is incompatible with the strong financial capacity of the government is the low level of government finance in public service expenditure items such as education,health care,social security and so on.The reasons are as follows:first,the promotion championship based on relative performance appraisal results in non-cooperative competition among local governments,which leads to the formation of a financial expenditure structure of "laying stress on infrastructure construction while neglecting services".Second,the financial supervision and restriction of local governments are insufficient,so local public resources can not be rationally allocated.In this context,the transformation of local government governance model and the promotion of public finance reform are very important.As an innovation of local government governance model and public finance reform,participatory budgeting practice in Wenling City of Zhejiang Province has attracted great attention from society and academia.However,the existing literature on the impact of participatory budgeting in Wenling City mostly focuses on the value significance level.More empirical studies are needed on how participatory budgeting affects local governance.Based on the panel data of 16 towns(streets)in Wenling City from 2001 to 2016,the empirical results show that participatory budgeting has a significant positive impact on the proportion of education,social security,medical and health expenditure in total fiscal expenditure and the transparency of budget expenditure,and has a significant negative impact on the proportion of general public service expenditure.Based on the above findings,the author puts forward corresponding policy recommendations for the development and promotion of local government governance and participatory budgeting.