The Impact Study Of China Fiscal Decentralization To Local Government Expenditure Structure

“Everything has its starting point and ending point,if you know the order of thing,then you will be not far from success.” There is no doubt that the Economy is only our approach and the starting point,and the Livelihood of the people is the fundamental and the ending point,we should set the Livelihood as the ultimate goal in the same time of developing Economic.When the Fiscal Decentralization has become a world phenomenon without exception,however,the reasonable Structure of Local Government Spending is not a common phenomenon.In the light of the Fiscal Decentralization mode diversification,to explore what kind of decentralization mode is helpful to optimize Expenditure Structure of Local Government is very meaningful.The rationality of the Structure of Local Government Spending indicates the rationality of the Financial System,as one of important systems,Financial System is the foundation of governance,important pillar and the guarantee of optimizing the allocation of resources,safeguarding the unity of the market,promoting social justice,realizing the national security,and one of the feature of a powerful country is also necessary to set a good government governance mode.“The thriving of a government depends on meeting the public demand.” At present,the Local Government expenditure obviously tends to the opposite of Livelihood Expenditure,the Livelihood Expenditure can not satisfy the needs of people,it's obvious that the economy has already run out of the right way,so it's urgent to pull the Local Expenditure back to the right way.In this paper,we classificated the Fiscal Decentralization and Local Government expenditure,and then we studied about the Fiscal Decentralization influence to the Local Government expenditure from separation of main body,separation of the direction and what is separated,and then analyze the particularity of China Fiscal Decentralization,including the characteristics of political centralization and economic decentralization in parallel,clear property division and fuzzy responsibility division co-exist,relative concentration of finance rights and relatively decentralized responsibility co-exist,long-standing and different pattern extra-budgetary revenue,a huge transfer payments and high ratio special transfer payments,from the aspects of theory to analyze what the Fiscal Decentralization in China had caused to the Local Government Expenditure Structure.And through access to relevant data in our country,we made an empirical research of relationship between the two main body based on the matching between public demand and supply condition.The study suggested that the phenomenon of China's local government tending to the opposite of livelihood expenditure related to the pattern of China's fiscal decentralization,one of the most important reason is that the finance rights decentralization between the central government and local government doesn't match.The central government has a bigger ratio of finance rights and a smaller duties.So it is concluded that to optimize the expenditure structure of local government we should reduce the finance rights of central government or increase the duties of central government.Thus advising to optimize the distribution of rights and duties,perfect the transfer payment system.In addition,the competition between local governments is also one of the reasons which affect the expenditure structure,the greater the competition of local government and the greater distort of the local government expenditure structure,thus advising to reasonable the local governments competition and promote the reform of mechanism.