Empirical Study Of The Effect Of Intergovernmental Transfer Payments On The County Level Expenditure Structure Of Public Service

The county government are major suppliers of China's basic public services,and they receive large amounts of financial transfers from higher governments,which together account for a very large proportion of the total revenue of the county governments and have become the main source of funds for the local provision of basic public services by the county governments.Therefore,it is a question worth studying how the higher level financial transfer funds affect the basic public service expenditure structure of county governments.This paper deduces the influence of special transfer payment funds and general transfer payment funds on the basic public service expenditure structure of the local government through case study(a city of poor counties in western China--Z County).The effect of the two transfer payments on the structure of basic public service expenditures is obtained.In order to clearly demonstrate the impact that the fiscal transfers to the basic public services expenditure structure,this paper selects data of Z County from 2007 to 2016.The conclusions are as follows:(1)The total amount of transfer payments has been increasing,effectively increasing Z County's financial resources,and the scale of fiscal expenditure also increased significantly with the scale of transfer payments in Z county;(2)The influence of transfer payment on the scale of fiscal expenditure is higher than that of local fiscal revenue,and there is the effect of "flypaper" in Z County.That can be included from the transfer of payment funds has obviously promoted education and medical expenditure,so it can be concluded that the Z county local government is more inclined to use the transfer of payment funds from the higher government to meet the higher government's assessment target expenditure;(3)Both general transfer payments and earmarked transfer payments have a great impact on the expansion of the education,health and capital expenditure categories,but the general transfer payments have a greater impact on Z county.It does exist some problem in transfer payments in China.Major policy recommendations as:(1)Reasonable delineation of the responsibility for fiscal expenditure at the county level;(2)Proper enhancement of county government financial rights;(3)Reasonable determination of the scale of financial transfer payments at the county level;(4)Optimizing the structure of fiscal transfer payments at the county level;(5)build a more clearer hierarchy of the legal system as well as supervision mechanisms.