Research On Infrastructure Investment And Financing's Impact On Local Government Debt

Since the founding of the People's Republic of China,China's investment in infrastructure has maintained a relatively strong intensity.With the development of the economy and the improvement of living standards,people's demands on infrastructure have become higher and higher.The construction,operation and maintenance of infrastructure cost more funds,which increases the burden of the government.Under the system of fiscal decentralization,local governments are under financial pressure.Gradually,the debt problem began to highlight.In recent years,the central government has issued such documents as the State Council's Opinions on Strengthening Local Government Debt Management to manage local government debt and regulate the development of local government debt.In terms of the impact of infrastructure investment on local government debt,academic research on this topic is rare.Therefore,the study of this topic can provide suggestions for debt management from the perspective of infrastructure investment,which has certain practical significance and academic significance.In this paper,literature research,qualitative analysis and quantitative analysis(linear regression analysis)are used to study the selection of variables,which is innovative.Firstly,this paper defines the research methods and technical routes through literature research at home and abroad,secondly,defines infrastructure and its role through public goods theory and economic growth theory,and explores the factors of local government debt through principal-agent theory,optimal efficiency theory and separation of power and responsibility theory.Afterwards,by studying the significance,current situation,source of funds and central policy of infrastructure investment in China,the importance and investment characteristics of infrastructure investment are explained;by means of financial expenditure and fiscal decentralization,the impact of infrastructure investment on local government debt is explained;by studying the division,current situation,provincial characteristics and central policy of local government debt,the debt is explained.It is urgent for us to do research.In this paper,we use the debt of the local government directly responsible for repayment as the explanatory variable,the interactive factors of infrastructure investment,economic growth,infrastructure investment and economic growth as the explanatory variable,and the fiscal decentralization,soft budget constraints,economic development level and urbanization rate as the control variable.The results show that,at the national level,when the economic growth rate is more than 7.23%,infrastructure investment can reduce government debt by promoting economic growth.When the economic growth rate is less than 7.23%,infrastructure investment can increase local government debt.At the same time,local government debt from the perspective of infrastructure investment is stimulated by officials,fiscal decentralization,urbanization rate and economic development level.It has significant effect.At the regional level,the eastern boundary is located at the economic growth rate of 7.90%.The soft budget constraint,fiscal decentralization and economic development level have a significant impact on the debt of the region;the central boundary is located at the economic growth rate of 6.52%.The fiscal decentralization,soft budget constraint and urbanization rate have a significant impact on the debt of the region;the infrastructure investment in the western region has no significant impact on local government debt.The direct impact of the book,however,can reduce government debt by promoting economic growth.The more significant variables are the level of economic development and soft budget constraints.Then,aiming at the robustness of the model,the robustness tests of debt index and infrastructure investment index are carried out respectively.According to the conclusions of this paper,some policy suggestions are put forward,such as maintaining reasonable debt-raising scale and economic growth rate,deepening budget and final accounts management,improving the efficiency of government funds,actively promoting investment in new infrastructure,and developing new investment models.