Design Of Transfer Payment System To Encourage Local Government's Financial Efforts

Since the implementation of the tax sharing system in 1994,there has been a significant structural asymmetry between the central government and the central government.Under the pattern that fiscal revenue accounts for roughly the same proportion,fiscal expenditure is excessively delegated to local governments,which assume too much responsibility for the supply of public goods and services.This vertical structural imbalance puts local governments under huge financial pressure.At the same time,due to the differences in the level of economic development,resource endowment and population structure in different regions,there are differences in income and expenditure demand,resulting in the horizontal financial imbalance between local governments.Perfect financial transfer payment system can not only balance the financial difference between regions,but also stimulate the efforts of local governments with low financial self-sufficiency.However,many scholars have found that the current financial transfer payment system in China plays an inverse regulating role in promoting the realization of the goal of equalization,and the transfer payment fund has a substitution effect on the local government's own income,which leads to the decline of local governments' efforts to increase their own income.Then,how does the current financial transfer payment system affect the financial efforts of local governments? How to improve the incentive effect of fiscal transfer payments?In this paper,according to the fiscal decentralization system-financial structural imbalances-the fiscal transfer payment-the thinking of local government behavior influence,at present our country from the perspective of fiscal stimulus and the problems existing in the fiscal transfer payment system,and the form of all kinds of transfer payment system design in detail,designed to improve the fiscal transfer payment system for local government fiscal effort incentive effect,and play a better fiscal transfer payment system in equilibrium local financial resources,and realize the positive effects of equal basic public services.This paper selects relevant financial data from 2009 to 2018 to study the impact of central transfer payments on the financial efforts of provincial governments.Based on the theoretical framework of tax sharing system,a model of the relationship between transfer payments and the efforts of local governments is established to study the effects of total transfer payments and structure on the financial efforts of provincialgovernments.The results of D-GMM estimation show that total transfer payments have a positive impact on the financial efforts of provincial governments,tax rebates and general transfer payments generally have a restraining effect on the financial efforts of provincial governments,and special transfer payments have an incentive effect on the financial efforts of provincial governments.In different regions,different forms of transfer payments will have different effects.Tax rebates and general transfer payments generally inhibit the fiscal efforts of provincial governments in the eastern belt and have a positive impact on the fiscal efforts of provincial governments in the central belt.In the western belt region,tax rebates stimulate the fiscal efforts of provincial governments,while transfer payments generally inhibit their fiscal efforts.Special transfer payments have incentive effect on the financial efforts of provincial governments in different regions,but the incentive effect on local governments in the eastern region is greater than that in other regions.Because there is no lateral transfer payment system in the strict sense in our country,this paper chooses to use the edgeworth box diagram only to elaborate in the theoretical part.The theoretical analysis results show that the horizontal transfer payment system strengthens the economic exchanges and close exchanges between the transferor and the recipient of financial funds,which is a win-win result for both parties.Based on the theoretical analysis and empirical results,this paper introduces financial incentive factors into the system design,and designs the system of various forms of transfer payments.Implementing the "factor law" for tax rebates;Optimize the design of "standard fiscal revenue" and "standard fiscal expenditure" in the transfer payment formula of equalization;The incentive effect of special transfer payments on local governments is more significant in developed regions,which aggravates the financial gap between regions to some extent,so it needs to be optimized.At the same time,this paper also draws lessons from the successful experience of the horizontal transfer payment system in Germany,designs the horizontal transfer payment system including incentive mechanism in China,so as to establish a relatively complete financial transfer payment system in China.The main innovations of this paper are shown in the following three aspects: first,based on the perspective of the financial efforts of local governments,this paper constructs a theoretical model between the financial transfer payment system and the financial efforts of provincial governments,and empirically investigates the incentive effect of the current financial transfer payment system on the behavior of localgovernments.Second,the indicators of fiscal decentralization and inter-regional fiscal competition are included into the scope of control variables,and the lagging item of fiscal effort is introduced to study whether there is path dependence in local government behaviors,so as to make the selection of indicators more comprehensive.Thirdly,detailed system design is made for various forms of transfer payment,including tax rebate,general transfer payment,special transfer payment and horizontal transfer payment,to provide policy Suggestions for improving the incentive effect of fiscal transfer payment on local government behavior.