| With the analytic methods of law and economics, this paper illustratestheoretically the legitimacy of fiscal decentralization, reviews the historical trajectoryof fiscal decentralization in China, investigates its practical phenomenon, assesses itscosts and benefits, summarizes the experiences of typical countries’ fiscaldecentralization, and propounds the legislative proposals to perfect the institution offiscal decentralization in China.In the first chapter, this paper illustrates the legitimacy of fiscal decentralizationtheoretically. And find that: the checks and balances of government’s power, the localself-governance and the principle of subsidiary are the sources of the fiscaldecentralization’s legitimacy in constitution. Meanwhile, improving the efficiency ofproviding public goods, improving government’s efficiency, and inspiriting theinstitutional innovation are the sources of the fiscal decentralization’s legitimacy ineconomics.In the second chapter, this paper reviews the historical trajectory of fiscaldecentralization in China. Since1949, the evolvement of fiscal decentralization inChina can be divided into three periods, including the tongshoutongzhi (the fiscalrevenue and expenditure are arranged absolutely by central government) during theperiod of planned economy, the caizhengdabaogan (the fiscal contract system) duringthe1980s, and the reform of the tax system since1994. The historical trajectory offiscal decentralization illustrates that, how to decentralize the fiscal authority from thecentre government to local government is the key of China’s fiscal system reform.Meanwhile, the reform of the tax system in1994provides the basic structure of thepresent Chinese fiscal decentralization institution. Therefore, the key point of thispaper is surrounding the present fiscal decentralization institution since1994.In the third chapter, this paper investigates the practical phenomenon of presentfiscal decentralization in China. Firstly, the author investigates the constraint conditions of present fiscal decentralization, and finds that:(1) the fiscaldecentralization is lack of legal basis, and it results that the changes of fiscaldecentralization is led by central government;(2) the fiscal decentralization is alsorestrained by authoritarian political system, and it results that the local governmentsare just responsible for the higher instead of the local residents;(3) As the mainproductive factors (such as capital and labor) can’t flow freely, there isn’t namely‘mechanism vote by feet’ in China. These constraint factors lead the warping of localgovernment’s action——the local governments will purchase the shortdated economicgrowth, instead of maximization of social welfare after they control the local publicfinance. Because the economic growth can not only improve the right of fiscalarranging and enjoying the fiscal surplus, but also can provide promising politicalfuture to local governors.Secondly, the author investigates the shortages of present fiscal decentralizationin China. And find that:(1) the division of fiscal expenditure responsibility isambiguous, and the absence and offside of government exist at same time;(2) thedivision of tax is mainly based on the size of tax not the tax attributes and the benefitprinciple.(3) the transfer system has many shortages, including its policy objectivesbeing ambiguous, lack of standard procedures and reasonable arrangement.At last, the author summarizes the allocation of fiscal right and responsibilityunder the present fiscal decentralization institution in China. And find that, as thechanges of fiscal decentralization is led by central government, the present fiscaldecentralization institution mainly reflect the asks of central government, but the localgovernment’s requirements isn’t satisfied. It result that the fiscal revenues isover-centralized to the central government, the fiscal expenditure responsibility isover-decentralized to the local governments and the fiscal gap among differentregions is enlarged.In the forth chapter, this paper assesses the costs and benefits of fiscaldecentralization in China. Firstly, the author assesses the costs, and find that:(1) thefiscal decentralization significantly improved the efficiency of fiscal expenditure, thisis because that local government enjoys the fiscal surplus and local government has advantage to collect information about resident’s real preference and the provision ofpublic goods.(2) the fiscal decentralization forces the regional experiment, this isbecause proper regional experiment can promote economic growth and fiscal surplus.(3) the fiscal decentralization boosts economic growth, this is because that theeconomic growth can not only improve the right of fiscal arranging and enjoy thefiscal surplus, but also can provide promising political future to local governors.Furthermore, the author assesses the costs of fiscal decentralization in China.And find that the fiscal decentralization leads to high costs, it’s mainly caused by thefollowing three aspects:(1) the fiscal decentralization exacerbates the unbalanceddevelopment, this is because that local government has inspiration to developeconomy, instead of maximizing the social welfare.(2) the fiscal decentralizationenlarges the income inequality, both rural-urban and regional income.(3) the fiscaldecentralization leads the lost of economic efficiency, including severe buildingredundant projects and regional protectionism.In the fifth chapter, this paper summarizes the experiences of four typicalcountries’ fiscal decentralization. And find that, although those countries havedistinctly differences in economy, culture and polity, they have some commoncharacters in fiscal decentralization——they all have the legal basis, localgovernments have self-governed fiscal authority, and the governments have balancedbetween fiscal revenue and expenditure. Meanwhile, those countries have somevaluable experiences of the dividing fiscal revenue and fiscal obligation betweencentre and local government, and the transfer from centre to local government.In the sixth chapter, this paper propounds the legislative proposals to perfect theinstitution of fiscal decentralization in China. Firstly, we should obey the followingprinciples:(1) the statutory principle, namely adjustment of the fiscal relationshipamong government should base on legal procedures;(2) the proper decentralizationprinciple, namely we should find out the best point of fiscal decentralization;(3) therevenue-obligation match principle, namely the governments’ obligation should havecorresponding fiscal revenue;(4)the diversity principle, namely different regions havedifferent fiscal relationship. Secondly, this paper propounds the principles for dividing of fiscal expenditureresponsibility and revenue, and transferring. We should obey efficiency principle,benefit received principle and non-symmetry principle while dividing the fiscalexpenditure, obey efficiency principle, income principle and revenue-expenditurepartially-symmetry principle while dividing the fiscal revenue, and obey transparentprinciple, fairness principle and efficiency principle while constructing thetransferring system.Consequently, this paper propounds the general ideas and detailed proposalsdividing of fiscal expenditure responsibility and revenue, and transferring:(1) thegeneral idea of dividing fiscal expenditure responsibility——the responsibility ofarranging national public goods should be charged by central government, theresponsibility of arranging local public goods should be charged by local government,and the responsibility of arranging regional public goods should be charged by bothsides.(2) the general idea of dividing fiscal revenue——the high-flowing taxes shouldbe charged by central government, the low-flowing taxes should be charged by localgovernment, who have higher efficiency and income taxes enjoy the priority, at sametime, the close-related to economic growth taxes and the big size taxes should beenjoyed both by central and local governments.(3) the general idea of constructingtransferring system——we should construct a transferring system with various ways,based on clear policy objectives. |
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