Study On The Reasonable Scale Of County Government Debt In China

In China,the local government debt has provided strong financial support for local infrastructure construction and public welfare projects,and played a decisive role in promoting regional economic growth.Especially for county(district)level governments,based on the principle of efficiency optimization of public goods supply,most of infrastructure construction and public service investment are invested by county(district)level governments,whereas the grass-roots government often has less financial power,so the county(district)level government has a greater impulse,and feels more necessary to borrow debt to obtain construction and development funds.In recent years however,with the continuous expansion of infrastructure construction scale,the pressure of government revenue and expenditure is increasing gradually,and the phenomenon of borrowing in excess is serious.There are debts that are not necessary in some areas.This not only results in the waste of debt funds and low expenditure efficiency,but also makes the scale and the risk of local government debt increase continually.Therefore,it is particularly urgent to study and regulate debt borrowing of County(district)level governments.This paper analyses the local government debt at County(district)level from five aspects:firstly,based on public goods theory and rational government theory,it analyses the formation mechanism of local government debt and the necessity of its existence;secondly,it analyses the county(district)level government debt from the point of economic development level,economic structure,urbanization rate and regional financial resources;third,based on government data,it makes a preliminary analysis of the scale and risk of local government debt;the fourth is to select 75 counties(districts)in Hubei Province as an example,using panel data model and fixed effect analysis method to empirically test the connect between some influencing factors and new debt issued by local government in 2014-2016;the fifth is to predicts the debt space of the region based on given regression conclusion.and then puts forward some ideas and measures for effective debt management of County(district)level governments.The specific contents and main contributions of this paper are as follows:First,it combs the relevant literature and theory comprehensively,then refines the relevant research points,and summarizes the formation mechanism of local government debt.Through the research,it is found that the financial system factor is the essential reason for the formation of local government debt,and the external economic development is the catalyst for the formation of local government debt.Secondly,it carefully analyses the current situation and risks of county(district)level government debt in H Province,including the structure,scale and possible problems of county(district)level government debt,and finds that the regional debt risk of the poorer county is also relatively high.Thirdly,the influencing factors of the scale of newly issued debt of county(district)level governments are quantitatively analyzed.The study finds that the level of economic development,economic structure,urbanization level and regional financial resources have a significant impact on the local debt issuance.Based on the regression results,the future reasonable borrowing scale of some regions is predicted.Based on the above research,this paper puts forward some ideas and suggestions for effective management of county(district)level government debt.Specifically,it includes:promoting the budgetary management process of county(district)level government debt,improving the financing mechanism of county(district)level government,improving the supervision and management system of county(district)level government debt,and establishing the performance management system of county(district)level government debt.