Fiscal Relations Between Central And Local Governments From The View Of National Governance Modernization

The Third Plenary Session of the 18th CPC Central Committee put forward the goal of"modernization of state governance." The modernization of state governance is a grand proposition involving politics,economy,society,and the rule of law.The modernization of state governance is also a new proposition.It condenses the demands of the times on the party’s governing capacity and the transformation of government functions into a standardized system.Governance modernization has two meanings:one is the modernization of the governance system,and the other is the modernization of governance capabilities.There are three internal requirements for governance modernization.One is the scientificization of policies,the second is the democratization of policies,and the third is the rule of law in governance.The modernization of governance will ultimately be reflected in the modernization of "people".This paper aims to explore the theoretical and practical issues of the interstate financial relationship from the perspective of modernization of state governance.The fiscal and taxation system has always been the cornerstone of the state’s political power.The Third Plenary Session put the reform of the fiscal and taxation system at an important position in the modernization of state governance.The interstate financial relationship is the core of the fiscal system.It is inseparable from the state structure.The unitary state and the compound country correspond to different the intergovernmental financial relations.The degree of concentration of fiscal power is different,and each has its own advantages and disadvantages.The trend in today’s world is that the intergovernmental financial relations under different national structures are converging to the same point,that is,the countries with the original fiscal centralization gradually decentralized,and the central government’s financial power of the formerly decentralized fiscal federal state has an expanding trend.In our country,there are long-term vague and binary oppositions in the thinking of "centralization and decentralization".This paper puts forward a new idea of moderate decentralization based on the in-depth analysis of the reasons behind "centralization-decentralization".Since the 1970s fiscal federalism has gradually become the mainstream and development direction of national financial systems.Scholars such as Tibbert,Musgrave,and Buchanan have created classic fiscal federalism.With the rise of public choice theory in the 1970s,based on the combination of economic globalization and the experience of a large number of developing countries and countries in transition,a new generation of fiscal federalism theory was formed.These include a variety of "Chinese-style fiscal federalism" used to describe the Chinese experience.This paper argues that Chinese-style federalism has its rationality,but some features only have transitional characteristics.This paper sorts out the intergovernmental financial relations from ancient times to the present,and believes that it can be divided into three stages.One is the contractual system of the pre-Qin division of the land(quasi-fiscal federal system),and the second is the centralization of the Qin to the late Qing Dynasty-the county The third is the modern state financial system that has been formed since the Republic of China.In most stages of Chinese history,there are dilemmas in the intergovernmental financial relations.Then the paper discusses the basic theories needed to analyze the intergovernmental financial relationship,such as the theory of state structure,the theory of fiscal federalism,the theory of public choice and the theory of transfer payment effect.Borrowing the above theory,this paper comprehensively analyzes the current status of China’s contemporary intergovernmental financial relations.Including the Chinese style fiscal federal system,the China’s current fiscal decentralization system,the tax sharing system and the transfer payment system.Then the paper analyzes the problems existing in the intergovernmental financial relations,including the unclear definition of financial power,the dual structure of fiscal autonomy,the tax-sharing system and the lack of transfer payment system.In the fourth chapter,the key factors in the discussion of fiscal centralization and decentralization are discussed.The maximization of the welfare of the people as the objective function can effectively define the optimal degree and scope of the "set-and-divide",thus avoiding the "circle of chaos".Hey.Then on the basis of the existing theory,the fiscal decentralization index including the weight of personnel appointment is proposed,and then the existing optimal fiscal decentralization method can be used to get closer to the most favorable fiscal decentralization for the development of the whole society.For the central government’s recently proposed "sub-category sub-region" to determine the central share of the division of power and financial divisions,this paper also proposes improve proposals that according to the "per capita access to public services" as an indicator,according to the national benchmark and the provinces to determine the central share ratio.This paper measures one of the negative consequences of the existing tax-sharing system,the macro tax burden,and corrects the international tax pain index.Then use the OLS panel regression model to measure the actual effect of China’s transfer payment system.It is mainly divided into two levels.The first is the impact of central-level transfer payments on the local economy.The second is the impact of central-level transfer payments on local per capita income.The empirical analysis shows that the central general transfer payment has no significant effect on the economic growth of the provinces,and the effect on the per capita income is significant.The effect on the per capita income of the underdeveloped areas is greater than that of the developed areas.Infrastructure construction is more obvious.This result also provides evidence and ideas for accurate poverty alleviation.In the fifth chapter,we selected seven countries to analyze their central financial relations,including developed countries(English,American,German,French,Japanese),developing countries(Russia,India),and Eastern Confucian cultural countries(Japan).In the transitional countries(Russia)and the populous countries(India),in the five developed countries,the financial relations of the central regions are different due to their different historical and cultural traditions.Britain has a long history of decentralization.The United States has standard modern fiscal federalism.France is the representative of a single country in developed countries.Germany has a highly cooperative fiscal federal system for its historical reasons.Japan is practicing clear fiscal decentralization under highly centralized power.These international experiences show that there is no one-size-fits-all solution for the central government’s fiscal relationship,but it must be a combination of national political traditions and historical culture.In the sixth chapter,author puts forward some countermeasures and suggestions for the reform of China’s intergovernmental fiscal relations.