The Mechanism And Effect Analysis Of China's Fiscal Imbalance On The Revenue And Expenditure Of Local Governments

The effect of financial imbalance is complex.As the theory of fiscal decentralization points out,the existence of moderate financial imbalances is reasonable and necessary,but excessive financial imbalances will jeopardize the financial behavior of local governments,so that the process and internal mechanism of financial disequilibrium of local governments will be fully explored and studied and new to our country.The reform of a fiscal and tax system is of great significance.According to the official statistics,in 1995,the difference between the expenditure and the income of the local finance in the national finance was 22.93% and the overall trend was up.In 2011,it was up to 34.3%,30.97% in 2015 and 30.74% in 2016.The existence of the gap of local fiscal revenue and expenditure rises to the system level,which is the vertical imbalance of Finance under the reverse movement of revenue and expenditure decentralization.Because the reform of fiscal decentralization in China is born in the centralized administrative system,political centralization and economic decentralization lead to the severe financial imbalance under the heterogeneity of revenue and expenditure decentralization.As a direct body that affects the welfare level of the residents,the fiscal behavior of the local governments is bound to be restricted by the institutional imbalance.In addition,the lateral financial disparities,which are generated by the natural endowments and economic development between the regions,that is,the lateral financial imbalance,also affect the level of the local government's fiscal revenue and expenditure to a certain extent.Therefore,from the perspective of the local government's fiscal revenue and expenditure,it is the focus of this study to discuss the effect mechanism and effect of the high financial imbalance,especially the asymmetric balance of revenue and expenditure in the current stage of our country.The analysis of the mechanism and effect of the financial imbalances on the financial behavior of the local government is complex and has not been consistent in the related theory.Therefore,the article first is based on the typical fact of the Chinese financial decentralization reform,then redefines and comprehensively measures the vertical balance of China's finance from the Perspective of revenue and expenditure decentralization.And using the previous research to measure the horizontal financial imbalance level by using the weighted variation index,and then from the local government financial expenditure and income dimension,discuss the role mechanism of financial imbalance to the bias and tax efforts of public expenditure organizations,and take into account the complexity of the impact of financial imbalance on local government tax efforts,and draw lessons from the study of Liddo et al(2015)establishes a theoretical model of fiscal vertical,horizontal imbalance and local government's tax efforts.Then based on the mechanism of action and theoretical deduction,the econometric model is set up in turn to examine the influence of financial imbalance on the public expenditure structure bias and tax efforts of local governments,namely,to construct a dynamic panel data model and to take a systematic GMM estimate to examine the effect of fiscal imbalances on local government's public expenditure structure bias.The two is to establish the dynamic confront equation group model and take the three stage least square method.Based on the whole sample and the sub sample,we examine the effect of financial imbalance on local government tax efforts respectively,and calculate the true effects of the transmission paths through standardized regression.Finally,this paper draws the following conclusion: In the field of fiscal expenditure,fiscal imbalances in our country significantly affect the local government public expenditure structure bias,which is accompanied by the deterioration of fiscal imbalance,the local government public expenditure structure bias problem is even more serious,and the local government public expenditure structure Bias has a deferred effect,that is,the increase in the degree of bias in public expenditure structure in the current period will lead to more difficult adjustment and optimization in the next period.In the area of fiscal revenue,vertical financial imbalances significantly reduce or curb local government tax efforts through the direct role of local government tax efforts;fiscal horizontal imbalances affect local government tax efforts.The large difference,that is,the horizontal imbalance of fiscal development in developed regions directly reduces local government taxation efforts.Horizontal imbalances in fiscal development in underdeveloped regions can not only directly reduce local government tax efforts,but also indirectly affect local government tax efforts through positive incentives for vertical fiscal imbalances.Negative inhibitory effect.In addition,whether it is at the national level or regionally,the negative effects of fiscal imbalances on local government tax efforts are stronger than fiscal horizontal imbalances.