Research On The Division Of Powers And Fiscal Expenditure Responsibilities Below The Provincial Level

The distribution of responsibilities on administration and financial expenditure between central and local governments has been established under the framework of tax-sharing fiscal system in the system reform of 1994.The reform scheme only resolved the contradiction and expenditures between the central government and provinces.The current fiscal system implemented by government below the provincial level is extension of tax-sharing fiscal system.Such a fiscal system will significantly restrain the local governing performance and local economic development.Therefore,it has theoretical value and practical significance to study how to carry out the fiscal system reform among governments below the provincial level.There are five levels of governments in our country.Fiscal system implemented in governments below the provincial level is the prominent components.According to level-to-level administration principle,provinces should enact fiscal system implemented around their own area.Each provincial government would improve the fiscal system,straighten out revenues distribution from different levels,build scientific regulation for transfer payment,and formulate a fiscal system that is in line with the requirements of social marketing economy and the reality of their own.The fiscal system should center on promoting equalization of public service and arouse the enthusiasm of local economic development.The fiscal situations among governments below the provincial level are less satisfying comparing with that of the central government and provinces because of the widening gap between incomes and expenses,which has adverse effects on the supply of public goods and services,as well as governing abilities.Since the central government has put forward the idea that adjusting the relationship between central government and local governments is for building a modern financial system with governmental authorities adapted to expenditure responsibilities.Under this circumstance,with the fiscal decentralization and local fiscal system as the theoretical basis and foothold respectively,this paper looked at responsibilities in administration and financial level through the perspective of fiscal distribution and arrived at some suggestions to regulate and perfect relative policies with fiscal distribution theories.This essay aims to research on several aspects including basic financial situations in governments below provincial level,problems involved,possible causes,theories on fiscal systems,developed countries' experiences etc.And takes Inner Mongolia Autonomous Region(IMAR)for instance,based on the above mentioned tax-sharing fiscal system,and concerning the local conditions,IMAR implements a level-to-level fiscal administration which refers to different levels holding different responsibilities,and then put forward suggestions.This paper is composed of six chapters.Chapter one is the introduction part which is mainly elaborating the background and significance of the topic,and current situation,objective,methods,content and structure of this research.Chapter two is the theoretical basis.It explains and evaluates the fiscal decentralization theory and the fiscal transfer payment system.Meanwhile,this part analyzes the marketing similarity equilibrium,which is a theoretical foundation for the analysis of local governments' efficiency.Chapter three is about the current situation and tendency of fiscal system among governments below the provincial level,which describes and analyses the procedure and outcome of fiscal system reform and aims at the beginningand developing direction.The United States,Germany,Japan,are selected as the studying objects.Through comparative analysis at distribution of responsibilities on administration and financial,tax allocation and intergovernmental transfer system applied in these countries,the author summarizes some optimal fiscal system design and implementation methods among local governments,in order to provide thoughts for improving a multilevel fiscal system among governments below the provincial level.Chapter four is an analysis on operations and problems existed in fiscal systems among governments below the provincial level.The tax-sharing fiscal system has definitely enlargedlocal governments' power on financial expenditures of their own revenue and their jurisdiction on economic issues.However,quite a lot of problems still exist in the system operation and the causes are discussed in this chapter as well.Chapter five talks about many problems we are facing today,such as fiscal difficulties among local governments,overall coordinated development of regional economy,equalization of public service,which forces the reform of fiscal system,especially at the point of scientific distribution of responsibilities on administration and financial expenditures,and takes Inner Mongolia Autonomous Region(IMAR)for instance.Based on the above mentioned tax-shared fiscal system,and concerning the local conditions,IMAR implements a level-to-level fiscal administration which refers to different levels holding different responsibilities.Level-to-level fiscal administration has become the inevitable trend under the market-oriented economy.Chapter six,according to the analysis of the distribution of responsibilities on administration and financial expenditure between central and local governments,comes up with the fundamental thoughts and paths for improving a multilevel fiscal system among governments below the provincial level.The main path is to establish a complete multilevel fiscal and tax-sharing system among governments below the provincial level.The function of such a fiscal system should be scientifically defined.The administrative responsibilities should be clarified.The expenditure demand should be reasonably determined.The fiscal allocation should be further regulated.And finally we can achieve a rational adjustment within all levels below provinces.Compared with the relative research conclusions in China,this paper covers following innovative outcomes.a.In order to solve the problems involved in fiscal system among governments below the provincial level,a modern fiscal and tax-sharing system with integration of power and responsibility should be built,the responsibility of administration and expenditure should be clarified.b.The levels of governments and budgeting at and below provincial level would be changed to three levels instead of four levels,which can strengthen the functional orientation of fiscal department at provincial level.The levels of governments and budgeting could be provincial level,county(city)level,town level.c.local governments should be given suitable rights for fiscal management.It means that each of the local governments below the provincial level has certain rights on jurisdiction as well as fiscal management.Due to the limitations of the author's capacity and studying perspectives,this paper has some deficiency.They are mainly reflected at aspects below: a.researching data is not sufficient enough.The major cause is it is very hard to gain relative data and materials,which leads to an incomprehensive introduction for the reality and changes.This deficiency will affect the accuracy of researching results to some degree.To reduce the effects caused by such a deficiency,qualitative analysis is applied a lot in order to make up the deficiency of quantitative analysis;b.some relative research methods are not applied in this paper.Since fiscal system is closely related to the provision of public goods and services,arrangement of financial fund especially at the countryside level,it cannot be separated from the guarantee of making fiscal decisions democratically and scientifically,giving suitable rights to local governments for fiscal management and implementing fiscal system effectively.Therefore,the distribution of responsibility on administration and financial expenditure among governments below the provincial level is not only economics issue but also democratic fiscal problem.However,this paper involves economics and public finance prominently.The relative research methods like politics,sociology and management science are excluded.