Study On Tax Decentralization And Local Government Governance

With the deepening of reformation and opening,the local government in China has played a more and more important role in the process of social development.Along with this trend,more and more scholars pay attention to the governance of local government.Especially at present,our country is in the period of social transformation,but also in the time of contradictions and opportunities.In this period,local government governance is facing opportunities and challenges.How to effectively improve the governance capacity of the state and government has become an inevitable topic of the times.At the same time,China is constantly pushing forward the reform of tax distribution system,which brings tax decentralization between the central and local governments and governments at all levels.The level of tax decentralization means the amount of tax that local governments can actually retain.Tax revenue is the main financial source of local government,and it is the guarantee for local government to perform its functions smoothly.Governments at all levels can achieve good governance results only if they perform their functions well.Therefore,tax decentralization may affect the performance of local government functions,thus affecting local government governance.Today,local government governance is playing an increasingly important role,the reform of finance and tax system should consider its impact on local government governance.Therefore,It is of practical significance to study the impact of tax decentralization on local government governance.This paper focuses on tax decentralization and local government governance,and adopts the research method of combining theory with empirical research.According to literature review,this paper analyses the theory of tax decentralization,the impact of tax decentralization on local government governance and constructs a set of comprehensive evaluation index system of local government governance level,and using the method of entropy value to calculate the annual local government governance score of each province.By comparison,it is found that there are obvious regional differences in the level of local government governance in China.The level of governance in the eastern region is much higher than that in the central and Western regions.Subsequently,this paper chooses provincial panel data except Tibet,Hong Kong and Taiwan from 1999 to 2016.After huasman test,fixed-effect model is used to demonstrate the conclusion.It is found that tax decentralization has a significant positive stimulating effect on local government governance,and the improvement of tax decentralization will promote the improvement of local government governance.