Theoretical And Practical Research On Local Government Revenue Bonds Supporting Rural Development

Currently,the China-US trade relations are tense,and the global economy faces severe challenges.There is a significant increase in downward economic pressure,leading to greater financial growth pressure for local governments at all levels.The issuance of local government special bonds to support rural development and increase bond funds for agriculture and rural areas has undoubtedly become an important path to solve funding difficulties and promote rural revitalization.However,the current share of local government special bond funds invested in rural development is small,making it difficult to effectively meet financing needs.To effectively utilize local government bond financing for rural development,several key issues need to be addressed.Firstly,can debt-financed investments in rural development projects in financially challenged rural areas achieve the goal of addressing shortcomings,promoting long-term growth,and fostering rural economic development? Secondly,what factors currently limit the utilization of local government special bonds for rural development,restricting their scale expansion? Finally,how large is the current funding gap for rural development,and how does using local government bond financing to bridge this gap affect government debt? In response to these questions,this paper focuses on the support of local government bonds for rural development,following the principles of combining theoretical research and empirical analysis.It analyzes the current situation and explores logical mechanisms,financing preferences,sustainability analysis,and international experience in the framework of public goods,public debt,and fiscal decentralization.The paper presents policy recommendations and innovative mechanisms for the support of rural development through local government special bonds,aiming to expand the scale of bond funds invested in agriculture and rural areas,activate the vitality of agricultural and rural development,and promote the implementation of the rural revitalization strategy.The conclusions of the paper are as follows:(1)Starting from analyzing the necessity of local government special bond support for rural development,it scientifically explains the characteristics of local government special bonds,such as earmarked use,collective issuance,and exclusion from deficits.It thoroughly analyzes the reasons for local governments to issue bonds in expanding agricultural and rural investment,revitalizing rural resource assets,and reducing government financing risks.(2)Using an economic growth model,it constructs a theoretical mechanism framework for local government special bond support for rural development and reveals the nonlinear relationship between the scale of rural development bond financing and rural economic growth.It demonstrates that the optimal scale of bond issuance and rural economic growth,as well as the stock of public capital,follows an inverted U-shaped relationship and is influenced by capitalization rates and financing rates.(3)Defining four types of financing preferences for local government special bonds supporting rural development: prudent type,land revenue type,short-term financing type,and comprehensive advantage type.The paper points out that the main reasons for financing preferences lie in the project evaluation criteria focusing on economic indicators,the lack of special support for rural development bond projects,and the absence of unified standards for collective development projects.(4)Predicting the scale of local government investment in rural development and funding gaps for the next five years and evaluates the sustainability of utilizing local government special bond financing.The research finds that the funding gap for rural development in the next five years will result in an average annual local government debt ratio of 1.75%.The upper limit of local government sustainable debt ratio ranges between 88.92% and 89.49%,indicating a generally relaxed debt space.However,due to the highly uneven distribution of funding gaps,municipal and county-level governments will bear over80% of the funding gaps,accounting for more than 30% of their annual fiscal revenue.As a result,municipal and county-level governments will face heavier debt burdens and higher fiscal risks.(5)Providing policy recommendations for local government special bond support for rural development,including the construction of a budget system for special bonds linked to land indicators,optimization of project evaluation and review mechanisms for rural development special bonds,and innovative models for multiple financing combinations of local government special bonds.The paper proposes the PFP Rural Development Benefit Special Bond as a way to solve the problem of financing rural development using bonds.The innovations of this article include:(1)Clarifying the logical relationship and mechanism between local government special bond financing and rural development at the theoretical level through the construction of an economic growth model based on local bond issuance.(2)Identifying the financing preferences of local government special bonds to support rural development and determining the institutional reasons for the limited scale of bond funds directed towards rural development.(3)Conducting research on rural revitalization special bond projects as a sample to supplement the lack of empirical research in the field of rural development bond financing..