Local Financial Expenditure Responsibility Division And People's Livelihood Public Service Supply

The division of intergovernmental fiscal expenditure responsibility is an important content and key link in the construction of financial system,and is the premise and basis for governments at all levels to perform their functions.Only on the basis of clear delineation of government levels and reasonable division of financial powers and expenditure responsibilities between central and local governments can governments at all levels effectively provide basic public services and give full play to the foundation and important pillar role of Finance in national governance.Taking education and social security as two basic public services for livelihood as examples,this paper intends to study the impact of the division of fiscal expenditure responsibility between governments at provincial and subprovincial levels on the efficiency and equalization level of local livelihood public services.Firstly,we use the input and output indicators of 30 provinces,autonomous regions and municipalities directly under the Central Government in the fields of education and social security from 1998 to 2007,and use the data envelopment analysis(DEA)and the index system of public service equalization based on the perspective of regional differences,respectively,to calculate the education and society of provinces,autonomous regions and municipalities directly under the Central Government.Then,using panel data of 30 provinces,autonomous regions and municipalities directly under the Central Government from 1998 to 2007,using Tobit model with restricted dependent variables,this paper empirically analyses the impact of fiscal expenditure responsibility of education and social security of Prefecture(city)and county governments on local education and social security public service supply efficiency and equalization level,and measures the impact of fiscal expenditure responsibility on local education and social security public service supply efficiency and equalization level.This paper calculates the optimal criteria for dividing the fiscal expenditure responsibility between provincial and prefectural(city)county governments under the two different fiscal policies of efficiency and equalization.The empirical analysis results show that there is a significant positive correlation between the fiscal expenditure responsibility of prefectural(city)and county governments for education and social security and the supply efficiency of local education and social security public services;whether for educational public services or social security public services,the fiscal expenditure responsibility of prefectural(city)and county governments is related to their supply efficiency or equalization degree.There is a significant inverted "U" relationship,that is,the optimal proportion of government financial expenditure at the prefecture(city)and county level,which makes the efficiency of education and social security public services supply or the level of equalization the highest.Based on the consideration of improving the efficiency of public service supply,the optimal proportion of government expenditure on education and social security at Prefecture(city)and county level is 0.745 and 0.649,respectively,while the optimal proportion of government expenditure on education and social security at Prefecture(city)and county level is 0.783 and 0.682,respectively,considering the equalization of public service supply among regions.The inverted "U" relationship between fiscal expenditure responsibility and supply efficiency or the level of equalization and the optimal proportion of fiscal expenditure on education and social security of Prefecture(city)and county governments have obvious heterogeneity between eastern and central and Western regions.Based on the conclusion of empirical analysis and considering the actual situation of fiscal expenditure responsibility division of people's livelihood public services among governments in China,the policy suggestions of this paper include: firstly,the reform of local fiscal expenditure responsibility should be based on the optimal division criteria calculated by using reasonable and effective methods;secondly,the eastern developed regions should take education and social security as public services of people's livelihood.Expenditure responsibility should be given to Prefecture(city)and county governments more,while provinces with relatively low level of economic development in the central and western regions should properly centralize the fiscal expenditure responsibility of people's livelihood public services such as education and social security to provincial governments.Thirdly,when dividing the local fiscal expenditure responsibility of people's livelihood public services,all regions should conform to local actual development situation.Geographically determine the primary and secondary objectives of the two fiscal policies: efficiency and equalization,and then delimit the fiscal expenditure responsibility of the governments at the prefectural(city)and county levels.Fourthly,all regions should include the level of people's livelihood public service supply in the performance evaluation indicators of local officials,promote the upgrading and improvement of industrial structure,and strive to build an export-oriented economy to improve the degree of opening up of the region.