The Impact Of Fiscal Decentralization On High-quality Economic Development:

The 20 th National Congress of the Communist Party of China emphasized that achieving high-quality development is the foremost objective in the comprehensive construction of a modern socialist nation.This requires the establishment and enhancement of a contemporary economic system,which will accelerate the process of developing China into an economic powerhouse.Since the tax-sharing reform in 1994,fiscal decentralization has played an important role in promoting industrial structure adjustment and upgrading,regional economic coordinated development,improving the efficiency of fiscal resource allocation,and enhancing the public service sector.Contributing to high-quality economic development in China is crucial and fiscal decentralization is considered one of the most essential ways to achieve this goal.While existing literature has focused on the impact of fiscal decentralization on economic growth,there is a lack of comprehensive and systematic analyses from the perspective of promoting high-quality economic development.Consequently,in the reform of our economic system,does the fiscal decentralization system facilitate or inhibit high-quality economic development? How does fiscal decentralization affect high-quality economic development? These questions have important theoretical and practical significance.This thesis first systematizes the theories related to fiscal decentralization and highquality economic development,and sets forth the hypothesis that fiscal decentralization may enhance high-quality economic development and could influence high-quality economic development by means of technological innovation and basic infrastructure investment.The role of fiscal decentralization on high-quality economic development is then tested using a fixed-effects model based on panel data for Chinese cities from 2011-2019,and the reliability of the benchmark results is ensured by endogeneity and robustness tests.This thesis delves into the heterogeneous effects of fiscal decentralization on high-quality economic development,taking into account regional diversity,city size,and urban resource endowment as key perspectives.Further,this thesis adopts the mediating effect model to test the mechanism of effect.Finally,this thesis uses a mediating effect model to test the mechanism of action.And,based on the linear effect of fiscal decentralization on economic high quality,a threshold model is used to explore the non-linear effect of fiscal decentralization.The empirical study reveals that fiscal decentralization promotes high-quality economic development,and this conclusion still holds after endogeneity estimation and a series of robustness tests.The mechanism test results demonstrate that fiscal decentralization contributes to high-quality economic development by stimulating technological innovation and infrastructure investment.The heterogeneity analysis discovers that fiscal decentralization promotes high-quality economic development better in eastern,central,large cities,medium cities,and non-resource cities in China.An analysis of the threshold effect suggests that when the degree of fiscal decentralization is low,it hinders high-quality economic development.However,as the degree of fiscal decentralization increases,it has a positive impact on high-quality economic development.As the degree of fiscal decentralization continues to increase,it will significantly promote high-quality economic development,and there is an optimal promotion interval.The research in this thesis has the following policy implications: firstly,to improve the assessment system for local governments and promote the high-quality development of urban economies;secondly,to explore reforms to the fiscal and taxation systems and appropriately increase the financial expenditure capacity of local governments;thirdly,to increase support for the western region,small and medium-sized cities,and resource-based cities;and fourthly,to invest in regional infrastructure construction and increase scientific research investment.