Research On The Efficiency Of Local Government Debts In China

Local government debt is a double-edged sword.On the one hand,it plays a crucial role in solving local government funding problems,improving infrastructure construction and stimulating economic development.On the other hand,the increasing scale and risk of local government debt cannot be ignored.Improving the efficiency is the key for local government debt to play a positive role,suppress negative impacts and prevent risks.Reviewing the development of local government debt in China,the 1994 "Budget Law" prohibited local governments from issuing bonds,and the new "Budget Law”in 2015 allowed local governments to issue bonds,the development of local government debt was tortuous.The local government debt did not embark on a standardized and institutionalized development path until the implementation of the new Budget Law in 2015,when it was included in government budget management.From the perspective of non-normative forms,there were some hidden debt-raising behaviors before 2015.With the influence of the global financial crisis in 2008,the central government implemented the 4 trillion investment plan to stimulate the economy.At the same time,the local government debt broke out as the main form of local financing platform debt.The hidden debts have not disappeared after that the local governments had the right of issuing debt in 2015.The problem of local government debt control and debt funds use efficiency has become a core issue in debt management.In the background of "new normal" and economic downward,the policies of tax reduction and decentralization have further aggravated the financial pressure of local governments.How to use local government debt and improve its efficiency has become a very important and urgent problem.Based on this,the paper is mainly divided into the following sections to research the efficiency of local government debt.The first chapter is the introduction,it contains the introduction of the problem,the definition of related concepts,the research methods and meanings,the innovation points and the inadequacies.The second chapter is literature review,collecting and integrating relevant literature at home and abroad from the research methods,variable selection and influencing factors.The third chapter is about the theory of local government debt efficiency,including the principal-agent theory,the opportunity cost theory and the new public management theory.The fourth chapter is about the development and basic situation of local government debt.The fifth chapter is the preconditions for measuring the efficiency of local government debt:estimation of the debt scale in China.From the perspective of assets,the government revenue and expenditure data are used to estimate the scale of local government debt in 30 provinces from 2012 to 2017.The sixth chapter is the calculation of local government debt efficiency.This chapter used the three-stage DEA model and the Malmquist index model,selecting the estimated scale of local government debt as the input,and the corresponding infrastructure construction in the municipal sector as the output,to study the efficiency and factors of local government debt.It was found that the efficiency of local government debt was imbalanced between regions,and the efficiency in the western region was better than that in the central and eastern regions.Economic,social and policy factors had different effect on the efficiency of local government debt.The results of the Malmquist index also showed that the efficiency of local government debt in China went backwards.The short-term improvement appeared in 2015 and 2016 thanks to the local government debt management reforms.Chapter 7 is the conclusion and policy suggestions.Based on the conclusions of this paper,it proposed some suggestions on strengthening debt budget management and deepening institutional reforms.The main innovations of this paper are as follows:Firstly,the government's revenue and expenditure data was used to estimate the scale of local government debt,which made the efficiency measurement more accurate.Second,the three-stage DEA model and the Malmquist index method were used to reaearch the efficiency of local government debt for a long period with both static and dynamic perspectives.The main shortcoming of this paper was mainly that the output variables mainly focused on the expected output,without considering the undesired output.