Research On Local Government Debt Financing Model And Risk Management

Since the implementation of the tax-sharing reform in 1994,local governments have sought to raise funds for economic construction and used various means to borrow debts.As a result,they have accumulated huge amounts of local government debt,which has led to continuous highlights of local government debt risks.Before 2015,local governments did not have the power to use debt financing,but their general fiscal revenues could not meet the demand for capital for economic construction.They could only adopt financing methods represented by financing platforms that were outside legal constraints;The newly revised "Budget Law" that has been implemented has given local governments the power to issue bonds independently and the highly respected government and social capital cooperation models in recent years have opened up new paths for local government financing.For local governments,how to choose an efficient and healthy financing model and achieve a reasonable and efficient control of local government debt risks is a problem that needs to be solved.The article first combed the results of domestic and foreign scholars studying the debt of local governments and their risks.Based on the theory of debt and risk management represented by public product theory and risk management theory,the article begins with the development process of local government debt in China,and analyzes The root cause of the formation of the local government debt problem in our country and the necessity of local government debt financing.Then,through analysis and study of four more common local government financing models,this paper analyzes the possible debt risks of the four financing models,and uses Tianjin as an example to analyze the debt risk of local governments.Through the comparative analysis of the four financing models,it is concluded that the issuance of local bond and government and social capital cooperation model will be the main financing mode of local government in the future.Finally,on the basis of studying the experience of advanced local government bond management represented by the United States,Japan,and other developed countries,and combining China's own actual situation,the article proposes the management of local government debt from the perspective of financing model selection and debt risk management and control.