Research On Fiscal Transformation Under Major Function-Oriented Zone Planning

China’s Western development program, Revitalization of Northeastern China, the Rise of central China and the Priority of the eastern regional development constitute the main contents of the overall strategy of regional development (referred to as "four plate" strategy), its intention is to achieve coordinated development of regional economies through narrowing regional gap of per capita GDP, but in practice it brings about a series of problems such as disorderly exploitation of territorial space and ecological environment deterioration etc. In this situation the major function-oriented zone planning (MFOZ planning hereafter) comes into being in the period of the Eleventh Five-Year. The whole territorial space is divided into four types of major function-oriented zones, i.e. development-optimized areas, development-prioritized areas, development-restricted areas, and development-prohibited areas according to the carrying capacity of resources and environment, existing development intensity and future development potential, each of them has a different major function. That is to say under the MFOZ planning all regions are no longer required to vigorously promote economic development and urbanization, their future development directions and emphasis will be restricted in the scope of major functions, and all regions must develop by two ways of exploitation or protection based on the major functions. The strategy of major function-oriented zones inherits the ideas of coordinated regional development, but they are significantly different from each other. The strategy of major function-oriented zones is the good complement of the overall strategy of "four plate", and the proposal and implementation of the strategy of major function-oriented zones is designed to overcome the deficiencies of traditional coordinated regional development strategy. However, the problem is that when the regions are restricted to develop in strict accordance with the major function orientation, the economic interests of local governments and people will inevitably be affected. Development-optimized areas and development-prioritized areas will continue obtain more government revenue from the development of economies and society, thus the people in these areas also will get promotion in their living standards from local prosperous economic development; On the country, development-restricted areas and development-prohibited areas must abandon the development activities of large-scale industrialization and urbanization and in turn must invest a lot of resources in favor of agriculture development or ecological environmental protection or the protection activities of natural and cultural heritage of mankind. So the revenue obtained by these governments will sharp decreases and local people’s income and living standards will be negatively affected in different degrees. In such a situation the implementation of major function-oriented zone planning will inevitably suffer resistance coming from development-restricted areas and development-prohibited areas, and the implementation effect will be affected. Therefore, it is a key problem that how to design appropriate policies which not only highlight the major function orientation, and achieve the purpose of optimizing spatial development pattern, but also strength the confidence of governments and people to fully mobilize their enthusiasm and reduce various obstacles that may be encountered in the process of implementing MFOZ planning, and make it into a conscious action, ultimately achieve coordinated development of various types of major function-oriented zones. Obviously, it requires matched regional policies to support. In contrast, we believe that the transformation of fiscal policies and the reconstruction of performance evaluation system are more important than other policies. The reasons are in two aspects:firstly, the major function does not form automatically because it is also a phenomenon of "market failure", and it can only rely on state and local governments to resolve through government regulation and policy guidance. While fiscal policy is the most important regulation means of central and local governments. Secondly, in order to overcome the people’s negative psychology in the process of implementing MFOZ planning, ensure that local governments can obtain enough revenue to cope with its expenditure responsibilities, and protect people’s income and livelihoods not to be affected, the governments should resolve above problems through the transformation of fiscal policies. Thirdly, the MFOZ planning is the perfection and complement of traditional regional coordinated development strategy, its basic idea, starting point and content have both differences and common aspects with traditional regional coordinated development strategy. It endows new connotation for "region" and requires local governments to do something and not to do everything. It requires local governments to make corresponding adjustments for governing ideas, therefore, government performance evaluation methods also need to be adjusted.In view of this, this dissertation puts forward more scientific and more realistic interpretation for the connotation of coordinated regional development under MFOZ planning based on deep analysis about various obstacles that may be encountered in the process of implementing MFOZ planning. Through comprehensively reference the previous researches we then make the new object of coordinated regional development as the starting point and focus on the following problems:how does the fiscal policy complete the transformation to ensure and support the implementing of MFOZ planning, and how to adjust and improve local government performance evaluation system to promote regional coordinated development through analyzing the "market failure" in the process of implementing MFOZ planning and the factors impacting coordinated development of various types of major function-oriented zones. Ultimately we put forward some policy recommendations for improving the coordinated development of major function-oriented zones.In light of the above thoughts, this dissertation is intended to arrange contents as following:Chapter 1:Introduction. In this chapter we first introduce the research background, purpose and meanings, and then show the study framework and basic ideas by charts. Following we briefly depict the main research contents. Finally the main methods and data materials employed in the dissertation are introduced in detail.Chapter 2:Coordinative strategy of regional development and MFOZ planning. Since coordinative strategy of regional development is proposed in the mid-1990s, many scholars in the areas of regional research have made a lot of discussions and analysis on the concepts, contents, objectives and mechanisms of coordinative regional development, but with the proposal and implementation of MFOZ planning the main contents of coordinative regional development have changed essentially. Clearly in this situation we need to re-define the contents of coordinative regional development. Based on large literatures we firstly comb the understanding of the scholars for the concepts, contents and objectives of coordinative regional development and its evolution process and we mainly probe its rationality and inadequacies. Then we discuss the background, scientific base and contents of MFOZ planning as well as the differences and connections between the major function-oriented zones and traditional economic zones, so that we could define the new contents and objectives of coordinative regional development under MFOZ planning and provide a theoretical basis for the empirical analysis of regional development status in the following chapters. We think that the contents of regional coordinated development should contain the following two aspects:one is basic public services enjoyed by people living in different major function-oriented zones should equal, the other is people’s income gap should continually narrow.Chapter 3:Theoretical analysis of fiscal policy promoting the coordinative development of major function-oriented zones. Based on the last chapter we will make further theoretical discussions on the issue "how to make various types of major function-oriented zones develop coordinately?" First of all, we analyze the performance of "market failure" from three aspects, they are unbalanced economy, external effects and imbalanced public goods supply that existing in the construction of major function-oriented zones. It aims to highlight the irreplaceable necessity and importance of financial policies on the aspects of overcoming the "market failure" and ensuring the smooth implementation of MFOZ planning, so as to provide a solid theoretical basis for the subsequent empirical studies. Then we comb the contents of fiscal transformation and discuss significantly the possibilities and specific path through fiscal transformation promoting major function positioning, optimizing spatial exploration order as well as mobilizing local governments and people’s enthusiasm, reducing various obstacles which may encounter in the process of implementing MFOZ planning and making it into a conscious action, ultimately achieve coordinative development of major function-oriented zones. Finally, we end with discussion on corresponding limitations and guarantee mechanisms of fiscal transformation promoting coordinative development of the major function-oriented zones. In short, this chapter is try to enable people comprehensively understand fiscal transformation of different major function-oriented zones from theoretical perspective and also provides a theoretical basis for subsequent further discussion on fiscal transformationChapter 4:Coordinative development status of major function-oriented zones and its fiscal policy constrains. Based on the new contents of coordinative development of major function-oriented zones in the preceding chapter, we establish a set of evaluation indicator system, assess the status of major function-oriented zones and quantitatively analyze its fiscal impacted factors using 287 city-level data about residents’ income and basic public services covering China’s 31 provinces, municipalities and autonomous regions. The results show that there exist significant differences on the levels of residents’ income, basic public services and compressive development among the major function-oriented zones and the disparity in the aspect of basic public services is more severe; compared various major function-oriented zones the disparity within key development zones is particularly significant, then the limited development zones, while the disparity within optimizing development zones is not prominent. The results of spatial econometric model show that fiscal revenue, the structure of social fiscal expenditure and transfer payments are the important factors impacting the development level of major function-oriented zones, but their impaction are somewhat different:the rise of fiscal revenue only has a weak positive relationship with the development level of major function-oriented zones; the rise of social fiscal expenditure proportion can enhance the development level of major function-oriented zones; and transfer payment has a positive correlation with the development level of major function-oriented zones, which indicates that transfer payment one hand can promote the development level of major function-oriented zones, on the other hand it implies that the current transfer payment does not come into play in suppressing regional disparities in consideration of its obvious defects. Therefore, in order to make various major function-oriented zones develop coordinately the governments need to timely adjust the corresponding fiscal policies.Chapter 5:Local fiscal expenditure transformation of major-function-oriented zones. The results of last chapter show that the coordinative degree between major function-oriented zones is on the low side and fiscal factors(including fiscal revenue, fiscal structure and transfer payments) have a significant impaction on the development level of major-function-oriented zones, which tells us that governments must adjust fiscal policies so as to change the current uncoordinated situation. However not without regret the current academic exploration in this area is still remaining in the subjective judgment and empirical studies based on real data are very few. In view of this situation we shall try to do some further explorations in this chapter and next chapter. In this chapter we employ the 2844 county-level data coving our 31 provinces, municipalities and autonomous regions to examine the current status of fiscal structure. The results show that there are some problems in highlighting major function positioning and basic public services expenditure. Firstly, fiscal expenditure categories are not conducive to the formation of major function; secondly, the disparities of basic public services within major function-oriented zones are larger than the external disparities, especially the disparity within development-prioritized areas is more larger compared with the other two types of major function-oriented zones. The reason may be that the inputs of basic public services of various major function-oriented zones are distinctly different except the division of major function-oriented zones and their different resource endowments. Finally we point out the directions of fiscal structure transformation, discuss the constricted factors might impacting fiscal structure transformation and put forward some corresponding suggestions which contain the following aspects:increase the expenditure for protective zones to promote the formation of major function; equilibrium the basic public services expenditures within key develop zone to gradually narrow internal disparities of major function-oriented zones.Chapter 6:Transfer payments transformation of major-function-oriented zones. Currently in the process of boosting the construction of major-function-oriented zones transfer payments should play an important role in alleviating regional insufficient financial resources and disparities of basic public services and residents’income resulting from financial inequality. At the same time transfer payments also should support the ecological protection, production and circulation of agricultural products in limited and prohibitive zones. According to the classifications of transfer payments this chapter first carries out a detailed analysis for the scale, proportion and distribution of tax returns, general transfer payments and special transfer payments of various major function-oriented zones. We find that development-optimized areas get the largest amount of tax returns, and development-prohibited areas only can get few tax returns in a limited extent because of its lower base. The tax returns reflect the vested interests of local governments which is not conducive to the harmonious development of major function-oriented zones. General transfer payments and special transfer payments are the fairest transfers but because these two types of transfers obtained by county-level governments are smaller their effect in boosting the process of major function-oriented zones is thus limited. They can not fully play a policy support role on ecological protection, agricultural production and circulation. Therefore adjusting and improving transfer payments is an important means to promote the construction of the major function-oriented zones. The main policy recommendations are in the following several ways:optimize structure of transfer payments, namely increase general transfers and reduce or cancel tax returns; adjust internal structure of general transfers for increasing new indirections of balance transfers; clear and integrate special transfers to make it normalization, fairness and transparency; gradually establish normative horizontal transfer system; incentive local government to simplify personnel, reduce administrative costs, improve utilization efficiency of transfer funds; strengthen supervision and management of transfer funds as well as performance evaluation system; perfect the legal system of transfer payments.Chapter 7:Government performance evaluation system under MFOZ planning. The scientific assessment indicator system of local government performance under MFOZ planning is an incentive and restrained mechanism of promoting local financial transformation for highlighting major function and achieving regional develop coordinately. This chapter respectively establishes a set of local government performance assessment system containing three levels of indicators for four types of major function-oriented zones based on its features, major problems and future development orientations. Among them,4 identical first level assessment indicators including economic development, public services, people’s lives as well as resources and environment are established for the optimizing development zones and the key development zones, but the second and third level indicators (Specifically the assessment indicators reflecting the major function) are slightly different. Similarly, for the main agricultural-oriented zones the first level assessment indicators include agricultural development, public services and people’s lives; And for the key ecological function-oriented zones the first level indicators are made up of other three indicators, that are ecological construction, public services and people’s lives; While the core of the prohibitive development zones will become the uninhabited area in the future and only a small amount of management and protection personnel will exist in the buffer area, so only one first level indicator "resource management and protection" is established for the prohibitive development zones, and then the second and third indicators are set up. In the setting up of specific indicators we take into account the common indicators and the difference indicators, where the "difference indicators" are mainly used for the horizontal and vertical comparison among the similar major function oriented zones, while the "common indicators" can be used to compare among all the major function oriented zones. Finally we make a further discussion according to the problems that should be paid more attention to in application such as the construction of statistical database for major function-oriented zones and put forward some corresponding suggestions for realizing major function-oriented zones develop coordinately.Chapter 8:Full summary and research prospects. This chapter first summarizes the conclusions of the dissertation. Then some innovative works that the dissertation has done are summarized and some deficiencies existing in the dissertation are also pointed out, which can tell me the right directions for further improvement in future research.Compared with the similar studies existing in domestic, some propulsion works that the dissertation has done are mainly reflected in the following aspects:(1) New perspective view. For the study of local financial transformation of our country, we make major-function-oriented zone planning as the research background, and not only emphasize to highlight the major function positioning but also give consideration to the coordinated development of major function-oriented zones. We believe that the scientific MFOZ planning can be really implemented effectively only their relationship could be dealt with, Which help us further clarify the emphasis and directions of fiscal transformation. This study perspective is in accordance with the practice and it can be used to guide practice, which avoids vague.(2) Research methods innovation. The methods employed to study the fiscal transformation of major function-oriented zones in this dissertation integrate qualitative analysis and quantitatively analysis, and quantitative methods are major. For instance we integrate statistical indicator method, exploratory spatial data analysis methods and spatial econometric models to analyze the development status of major function-oriented zones and its impacted factors. And also we employ the traditional description statistical methods, non-parametric kernel density method to analyze the status of fiscal structure and transfer payments and the existing problems. The innovative methods provide a scientific strong support for the whole studies and it also achieve a great progress for the relative problems about major function-oriented zones.(3) Research contents innovation. We first make a detailed analysis for the contents of coordinated regional development under major function-oriented zone planning and make a detailed analysis to current status of regional development from two aspects of income disparities and basic public services. Compared with the similar studies we expand the analysis dimensions and the conclusions got from it seem more rational and comprehensive. At the same time we absorb the defines and insights of the scholars for the fiscal transformation and analyze the performance of "market failure" appearing in the process of implementing major function-oriented zones as well as the necessity and importance of fiscal transformation. Secondly, we analyze and explore the transformation of fiscal expenditure and transfer payments. Finally we try to design a performance evaluation system based on the new objects of regional coordinated development and major function positioning. The performance evaluation system is not only convenient for horizontal and vertical comparison between common types of major function-oriented zones (reflected by "different indicator" designed for different types of major function-oriented zones), but also convenient for comparison among different types of major function-oriented zones (reflected by "common indicator" designed for different types of major function-oriented zones). The performance evaluation system is the long-term security mechanism to promote the formation of regional major function positioning and fiscal transformation, which enriches the research of government performance evaluation system.