Debt Expansion Mechanism And Governance Of Local Government Financing Platform Under Dual Soft Budget Constraint

Since the financial crisis in 2008,the debt risk of the local government financing platform has emerged.Scholars have begun to explore the mechanism and governance mechanism of debt expansion of the local government financing platform.With the introduction of the new budget law,the research of "exploring the path to achieve the hardened budget constraint further dissolving the debt risk of local government financing platform" has also become a hot spot.Based on the theoretical study of the current fiscal decentralization,soft budget constraints and local government debt relations,this paper relates the financial decentralization and soft budget constraints,the soft budget constraints under the financial decentralization and local government debt,introduces the dual soft budget constraint concept,and considers the role of location factors,makes a deep inquiry into the institutional incentives for debt expansion of local government financing platforms.This paper theoretically derives the expansion mechanism of local government financing platform from the perspective of dual soft budget constraints under fiscal decentralization and financial decentralization,and makes a theoretical discussion on the location factors of the differences of local debt expansion.This paper applies the regression model of panel data to the expansion of local government financing platforms.The theoretical inducement is tested empirically.The empirical results verify the theoretical hypothesis: the higher the degree of fiscal / financial decentralization,the stronger the degree of soft budget constraint,the greater the degree of debt expansion of the local government financing platform;the degree of financial and financial synergy can reduce the degree of soft budget constraints,the stronger the financial and financial synergy,the smaller the degree of debt expansion of the local government financing platform.The results show that the regional advantages of Beijing,Shanghai and Hangzhou are obvious.These factors may include the development of financial industry,the development of the Internet,the development of private economy and other factors,which can be taken into consideration in various regions.The mainstream research holds that the governance based on the administrative control mechanism is not sustainable,and it will be more effective through the market control mechanism and the rule control mechanism.Combined with the conclusion of this study,this paper puts forward the corresponding countermeasures and suggestions: the rational arrangement of the decentralization of the central government to the local and the decentralization of the local to market can form a long-term mechanism to govern the debt of the local government financing platform,and we should guide the market forces to harden budget constraints from the institutional arrangement of fiscal decentralization and financial decentralization,and take full advantage of the advantages of regional advantages,and jointly restrain the unordered expansion of local government financing platform debt,and further resolve the debt risks of local government financing platform.