Research On The Budget Variance Of China's General Public Budget Expenditure

Public finance is the foundation and important pillar of national governance.Promoting the modernization of the national governance system and governance capabilities must adapt to this new function and position.Therefore,the current goal of deepening the reform of the fiscal and taxation system is to establish a modern fiscal system.As the core content of the fiscal system,the budget must play an important role in national governance.The modern budget system,which is the basis of the modern fiscal system,aims to "establish a fully normative,transparent,scientifically standardized,and restrictive budget system,and fully implement performance management." The basic elements of the modern budget system are complete content,scientific preparation,standardized implementation,strong supervision,performance-oriented,openness and transparency,and the most direct manifestation of the modern budget system is the scientific nature of budgeting and the standardization of budget execution.As a direct result of budget preparation and execution,budget variance has important reference value for fully grasping the level of budget management and discovering problems in the process of budget preparation,execution and supervision.Based on the typical facts of the budget variance in general public budget expenditure in our country,this paper deeply analyzes the overall characteristics and structural characteristics of the budget variance in general public budget expenditure.Based on the fact that the budget variance are systematically presented,the attributes of budget variance are summarized,the formation mechanism and influencing factors are analyzed,and the main factors affecting the budget variance are explored.First of all,this article will clarify the typical characteristics and evolutionary trends of the budget variance in general public budget expenditure from all angles.Combining with country's general public budget system,conduct in-depth and detailed research on the budget variance from different perspectives such as total level,structural level,and regional heterogeneity.Secondly,according to the logic behind the budget variance,summarize the attributes of the differences in budget and final accounts,and lay a theoretical foundation for objectively understanding the budget variance;according to cycle operation characteristics,comb out the objective factors,institutional factors,policy factors,economic factors,fiscal factors,and subject interaction factors that may affect the differences in budget and final accounts from the two dimensions of "budget process + budget structure",and conduct empirical tests with the help of an empirical analysis framework Third,the decomposition method based on the regression equation uses the R2-based Sharpley value decomposition and the MQ index to measure the contribution of different factors to the budget variance,explore the main sources of budget variance,and fully understand the weaknesses in country's budget management.Fourth,summarize the internal dynamic characteristics of the budget variance in general public budget expenditure,combined with the budget cycle from the beginning of the year budget-adjust the budget-final accounts,analyze the budget variance,and generally present an inverted V-shaped pattern of "increase first and then decrease" during the year.Finally,by drawing on the practical experience of budget preparation and execution in the United States,France,Japan and other countries,we have a clearer understanding of the defects in the process of government budget management in our country,and promoted the continuous improvement of our country's budget varaiance management system.The main conclusions of this paper are:(1)The budget variance at all levels are universal,and there are structural differences.The analysis of the overall characteristics found that since2013,the scale of the budget variance of general public budget expenditures has been greater than that of the revenue,and overspending has become a prominent manifestation of the budget variance;after 2011,the budget variance has declined,but the absolute scale has not decreased.The budget variance in 2017 exceeded that in 2011 and reached a new high;the scale and degree of budget variance at the local level were higher than those at the central level;the budget variance in provincial budget,adjustment variance,and implementation variance showed an inverted “V” shape.The adjustment variance is usually positive,and the execution variance is usually negative,but the final accounts are usually still greater than the budgeted amount at the beginning of the year.The analysis of structural characteristics found that the more detailed the expenditure items,the greater the difference in budget and final accounts,and the higher the degree of dispersion;the higher the stability of the difference in central budget and final accounts,and the greater the stability of social security and employment expenditures,agriculture,forestry and water expenditures,transportation expenditures,energy conservation and environmental protection expenditures,etc.Subject budget and final accounts vary greatly,while local budgets and final accounts for general public services,urban and rural community expenditures,energy conservation and environmental protection expenditures,agriculture,forestry and water expenditures are quite different;the differences in project expenditure budgets and final accounts are generally greater than the differences in basic expenditure budgets and final accounts.The analysis of regional characteristics found that the regional characteristics of adjustment differences are obvious,but the regional characteristics of implementation differences are not obvious.Among them,the adjustment difference in the eastern region is smaller.Therefore,overall,the budget varoance in the eastern region is smaller than that in the central and western regions.(2)Budget variance are universal,unpredictable,asymmetry,diverse in causes,and moderate.The budget variance should be understood objectively.The five major attributes of budget variance determine the complexity of the budget variance.Therefore,understanding the budget variance cannot be generalized.It is necessary to start from the main causes of the budget variance.Resolve institutional factors and encourage and support cost-cutting factors.Based on theoretical analysis,the causes of budget variance are classified into six categoriesobjective factors,institutional factors,policy factors,economic factors,fiscal factors,and subject interaction factors.(3)Through the game analysis among budget management subjects,it is found that the interaction between the financial department,the expenditure department and the supervision department affects the budget variance.In the budget preparation process,the factors that affect the game balance between the expenditure department and the financial department are: the proportion of the financial department to reduce the department budget,the cost of the financial department to review the budget,the cost of the expenditure department to falsely report the budget,the information of the financial department and the expenditure department The degree of asymmetry will affect the balanced results of the budgeting process.The game between expenditure departments shows that due to the established budget scale,the total amount of public goods and services that the society obtains is also certain,and this kind of competition requires corresponding costs,and the final result should be some kind of "negative sum" society loss.During the budget supervision process,through the analysis of the game process of whether fiscal balances are found,the balance result and the supervision department's penalties for untimely balances F,the actual balance of funds B,the scale of reduction in the second year after the balance,and the expenditure department chooses no balance The processing cost is related to the cost of the supervision department choosing to supervise.(4)Through the regression of objective factors,institutional factors,policy factors,economic factors,and fiscal factors through static and dynamic panel models,we found that economic uncertainty,potential GDP growth rate,fiscal revenue growth rate,fiscal expenditure structure,fiscal transparency,the proportion of transfer payments,promotion pressure,and policy uncertainty will significantly affect the budget variance.The analysis of internal dynamic characteristics shows that due to the different action paths of various factors,the impact on adjustment variances and execution variance is different.Some factors are significant in adjustment variances but no longer significant in execution variance—economic forecast deviation,fiscal revenue growth rate And fiscal transparency,some factors are not significant in adjustment variances but significant in budget execution variance—economic uncertainty,potential GDP growth rate,GDP per capita,fiscal decentralization,and policy uncertainty.(5)Through the use of Shapely decomposition and MQ index to decompose the contribution of factors influencing budget variance,it is found that the main sources of budget variance are institutional factors and fiscal factors,which are also affected by economic factors.Among them,institutional factors mainly play a role in influencing adjustment variances,and fiscal factors play a more obvious role in execution variance.(6)The reasons for the budget variance are regional heterogeneity.Through analysis,it is found that the three factors with the highest contribution rate in the eastern region are the pressure of promotion of officials,the growth rate of fiscal revenue,and fiscal decentralization;the three factors with the highest contribution rate in the central region They are fiscal decentralization,GDP per capita,and the proportion of transfer payments;the three factors that contribute the most to the western region are fiscal revenue growth,economic growth,and the proportion of transfer payments.The analysis of time heterogeneity found that with the continuation of time,there are some regular changes in the structure of influencing factors—the contribution of transfer payments has a downward trend,and the contribution of differences in macroeconomic forecasts has an upward trend.Generally speaking,general public budget expenditures at all levels generally have different levels of budget variance.We must objectively understand the budget variance,and implement classified policies-"a rational understanding of objective factors,proactively resolve institutional factors,and encourage and support cost-cutting factors." At the same time,it is necessary to realize that the main reasons for the difference between current budget and final accounts are institutional and fiscal factors.In the future,it is necessary to continuously optimize the system and strengthen the level of budget management.The specific policy recommendations are as follows: First,continuously improve current legal system and form a complete budget management legal system.The second is to strengthen the effective connection of various systems,further improve country's fiscal system,straighten out the responsibilities of intergovernmental revenue and expenditure,and improve the transfer payment system.The third is to improve the scientific nature of budget preparation,strengthen the management of mid-term financial planning,improve macro forecasting capabilities,and further improve budget management,accelerate the establishment of project expenditure standards,and further standardize budget preparation.The fourth is to further standardize budget implementation management,standardize the budget adjustment process,and establish a budget adjustment control mechanism.The fifth is to improve the budget supervision system,increase budget disclosure,create an open and transparent budget environment,and strengthen budget management and supervision.The sixth is to strengthen performance awareness and incorporate budget variance into budget performance management.