Research On Impact Of Public Goods Provision On Urban-rural Income Gap In China Under The Background Of Fiscal Decentralization

In the forty years of the reform and opening-up policies,China has made remarkable achievements in economic development,accompanied with huge changes in people' living standard.But,there are still lots of problems existing behind all these,including:unbalance problem of resource allocation between urban and rural areas and serious differences in supply of education and medical public goods between urban and rural areas,which are significant cause of the expansion of urban-rural income gap.Therefore,it is urgent for us to explore the mechanism of the difference of public goods provision influencing the urban-rural income gap.It is necessary for us to figure out the mechanism of action.Chinese-style fiscal decentralization is the basis to understand the economic and political characteristics in our country.It is essential to learn this reality background before conducting the research on the impact of the supply difference of public goods on the urban-rural income gap.Our fiscal decentralization is featured with centralization in politics and decentralization in economy,inspiring local governments in both politics and economy and restraining the local governments' behavior of public goods provision with “incremental championships” and up-bottom evaluation mechanism.Under the system of fiscal decentralization,the material benefits in central and local government are uncoordinated,leading a gap forming between the financial and property rights in local government,thus,local governments are pushed to supply more public goods to those cities and regions that would contribute more to the boost of GDP.Meanwhile,under the system of fiscal decentralization,these cities are developed into growth-at-any-price organizations tilting towards institutional arrangements and GDP-only officials encouragement system,aggravating the distortion of local government's behaviors in public goods supplying,which is bad for narrowing the urban-rural income gap.Based on this,in part of theoretical analysis,the paper introduces the interest-behavior-system-incentive political economy analysis framework,to explore the way of public goods provision influencing the urban-rural income gap under the system of fiscal decentralization,to propose theoretical assumption in the paper.In the part of positive analysis,by building dynamic panel model,the paper selected provincial panel data of education and medical care from 2000 to 2015 in China to conduct an empirical analysis on the impact of difference in public goods provision on urban-rural income gap under the system of fiscal decentralization.In this paper,the variables of fiscal decentralization is represented by the ratio of per capita expenditure in provincial budget to per capita expenditure in national budget.According to the result the dynamic panel model obtains,under the system of fiscal decentralization,both the gap between urban and rural areas education and the difference of public goods provision and medical care in urban and rural areas will lead to expansion of income gap between rural and urban areas.This should be due to the uniqueness of the fiscal decentralization system in our country.The result also confirms the assumption in this paper,e.g,the difference of public goods provision between urban and rural areas will lead to income gap expansion under the background of fiscal decentralization.Based on the theoretical analysis and positive examination on the impact of public goods provision on the urban-rural income gap under the background of fiscal decentralization system,the paper puts forward some political suggestions from four aspects.Firstly,establish interest coordinating mechanism and comprehensively plan the distribution of benefits in central and local governments to construct reasonable interest pattern;secondly,regulate the subjects' behaviors,enhance the supervision of the central government on local governments and perfect the punishment mechanism to reduce local governments' inappropriate behaviors in public goods supplying;thirdly,promote the institutional resolution,to fundamentally achieve the transition of development strategy from “urban preoccupation” to “urban-rural integration” thus to eliminate the effect of the long-term urban-preoccupation system.At last,design encouragement structure to energize government officials in both politics and economy.