The Impact Of Fiscal Decentralization On Local Government Investment In Science And Technology

Scientific and technological is the main driving force of economic growth,but the positive externality of scientific and technological achievements determines the characteristics of public goods,and cause the insufficiency,private sector investment and therefore,they promote the progress of science and technology to further promote regional economic development,the local government had to be supported on the area of science and technology activities.Data show that since 2006,proposed the construction of an innovative country,social science and technology investment has been growing rapidly,from 2007 to 2013 government science and technology investment increased from 178 billion 304 million yuan to 508 billion 430 million yuan an increase of 330 billion 126 million yuan,an increase of up to 15.14%,the local government investment in science and technology an increase of 185 billion 687 million yuan,more than the added value of the central government’s investment in science and technology in 2013,accounting for government investment in science and technology of 53.41%,the local government took more than half of the government investment in science and technology,this change indicates that the government investment in science and technology in the local government and the central government’s role is changing.As the balance of fiscal decentralization accrual system arrangement between a central and local division,since the Chinese tax reform has been implemented and the financial system,and the vertical political management system formed by combining with Chinese characteristics of "China decentralization",fiscal decentralization and political centralization.Through fiscal decentralization,local governments have obtained financial autonomy to a certain extent,which enables local governments to play a more important role in the management of local affairs.At the same time,from the fiscal decentralization in tax division between central and local governments,to ensure that the local area to bring to share the benefits of economic growth,provides effective fiscal incentives for local governments to further mobilize the local government to provide local public goods.The science and technology as the driving economic growth by the local government attention.But at the same time,"China decentralization" also determines the appointment of local government officials by the decision,GDP has become the main index ranking assessment of local officials.Therefore,promoting regional economic growth has become the main goal of local government officials.Compared to infrastructure construction expenditure which can promote regional economic growth directly,science and technology activities special attributes of high risk,long cycle also hindered the enthusiasm of the local government the investment of science and technology in a certain extent.So,a natural question is,what exactly does fiscal decentralization have on the local government?Is it incentive or restraint?In order to answer this question,this article from the two division of fiscal decentralization,which is divided from the perspective of fiscal revenue and the perspective of financial expenditure,discuss the different mechanism of fiscal decentralization on local government investment in science and technology.On the basis of theoretical research,this paper using China mainland 30 provincial(based on Tibet due to missing data will not be considered)panel data from 2001 to 2013,using spatial econometric methods,investigates the impact on local fiscal decentralization investment in science and technology.The study finds that fiscal decentralization significantly inhibits local government investment in science and technology,while the fiscal decentralization from the perspective of expenditure has a significant positive effect.Using different spatial weighting matrices and robustness tests using different fiscal decentralization measures,the results show that the results are robust.This paper argues that this result is possible between the central and local property rights and powers not to cause,so in the process of the further deepening of China’s financial system reform,need to straighten out the relationship between the central and local,scientific arrangement of property rights and powers,further play an important role in promoting fiscal decentralization of local government investment in science and technology.The conclusion of this paper will be helpful to improve our financial system,promote local financial science and technology investment,and then implement the strategy of innovation driven development.The arrangement of this paper is as follows:the first chapter is the introduction,which introduces the research background and significance of this paper.The second chapter is literature review,mainly combing the domestic and foreign research on the impact of fiscal decentralization theory and fiscal decentralization on local government investment in science and technology.The third chapter is the theoretical analysis.This paper focuses on the impact of fiscal decentralization on the local government’s scientific and technological input from the perspective of fiscal revenue and expenditure.The fourth chapter,based on spatial econometrics,empirically studies the impact of fiscal decentralization on local government’s scientific and technological input.The fifth chapter summarizes the full text,and puts forward relevant policy recommendations.