Effects Of Local Competition And Budget Soft Constraint On Land Finance Scale

For a long time,central and local governments have made outstanding contributions in promoting national economic development,and local competition has a boosting role in promoting national economic development,among which land finance plays an important role.However,in the context of China’s implementation of the dual-track growth of urbanization and industrialization,local governments are increasingly relying on land finance for economic development.By 2020,China’s land transfer revenue will exceed 8 trillion yuan,accounting for90% of the government-managed fund revenue and about 23% of the total fiscal revenue.This dependence is very unfavorable to the sustainable development of regional economy and the negative economic effect brought by the expansion of land finance scale is also increasingly prominent.It is particularly urgent to explore the motive of the increase of land transfer income,to find out how to effectively control the expansion of land fiscal income scale and change the way of economic development.On the one hand,the promotion mechanism of officials makes local competition become the internal motive force for local government officials to grab land transfer income.The local government financial behavior exist to soften the phenomenon of budget constraints,the local government in the pursuit of economic interests managed to bypass the budget constraints,in order to meet the needs of the construction of regional investment spending,local government priorities through the establishment of local financing platform,to use the land funds to increase public investment,promote regional economic development,Therefore,the soft constraint of fiscal budget provides objective conditions for boosting the scale expansion of local government expenditure and further expanding the scale of land fiscal revenue.Shows,the operation of land finance related to local competition and soft budget constraints,therefore,it is necessary to clarify the local government competition,soft budget constraints and the logic relations between land revenue and influence mechanism,the perfect financial system,transformation of the growth mode of the local economy,local fiscal sustainability and promote local economic quality effect has the reference significance.Based on this,this paper puts local competition,soft budget constraint and land finance scale into a research framework,and analyzes land finance problems from two aspects of incentive mechanism and constraint mechanism.Firstly,the relevant literature of the three are sorted out,and the relevant concepts are defined and theoretical analysis are carried out,so as to elaborate the current situation of soft budget constraint and land fiscal scale in China.The influence mechanism of the relationship among local government competition,soft budget constraint and land fiscal scale is analyzed,and research hypotheses are proposed.Based on China’s provincial panel data from 2007 to 2019,this paper analyzes the impact of local competition and soft budget constraint on land fiscal scale through a two-way fixed effect model,and empirically tests and analyzes the interaction between local government competition and soft budget constraint through simultaneous equations model.Finally,regional heterogeneity analysis and quantile analysis were used to further refine the research results.From the theoretical analysis and empirical analysis results,the research conclusions and relevant policy suggestions are drawn: first,change the concept of government officials’ performance assessment;Second,improve the transfer payment system;Third,optimize the structure of land supply and improve the efficiency of land use;Fourth,foster new drivers of local economic growth.