Research On The Impact Of Fiscal Transfer Payment On Relative Poverty

Poverty is a major problem that hinders the development of the global society and eradicating poverty is the common mission of human beings.According to the absolute poverty line defined by the World Bank with an average daily income of $1.9,by 2020,720 million people worldwide still live below the extreme poverty line,with an extreme poverty rate of 9.5%.In the early days of the founding of New China,poverty became a critical problem restricting social development.At the end of 1979,the national poverty population was 700 million.In order to get rid of the poverty situation,China has successively implemented the reform-oriented poverty alleviation,the development-oriented poverty alleviation and the targeted poverty alleviation.These poverty alleviation measures have achieved remarkable poverty reduction results and created a Chinese miracle in the history of human poverty reduction.According to the criteria of absolute poverty line in 2011,all the rural poor and all 832 poverty-stricken counties in China have been lifted out of poverty,and the phenomenon of absolute poverty has been eliminated historically.However,the disappearance of absolute poverty in the statistical sense does not mean the end of antipoverty.After 2020,China has entered the "post poverty alleviation era" with relative poverty as the main form,and solving the problem of relative poverty has become the focus of anti-poverty work.The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China clearly proposed to consolidate the achievements of poverty alleviation and establish a long-term mechanism to solve relative poverty.The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China emphasized"common prosperity",calling for the connection between poverty alleviation and rural revitalization,proposing to solve relative poverty as the cornerstone of promoting common prosperity.In this context,the study of relative poverty is not only conducive to enrich and improve the theory of poverty governance,but also provide policy reference for promoting the practice of relative poverty governance.Different from absolute poverty,relative poverty is related to income distribution.Inequitable initial distribution is the logical starting point for the formation of relative poverty,and this problem is difficult to be effectively solved through market mechanism.Therefore,it is necessary for the government to bear the governance responsibility of relative poverty and correct the unfairness of primary distribution through financial redistribution,this has a favorable impact on the governance of relative poverty.Based on the financial differences between regions and guided by the equalization of basic public services,fiscal transfer payment is an important institutional arrangement to strengthen the function of fiscal redistribution and reverse the imbalance of wealth distribution among residents.It also constitutes the bottom line of institutional guarantee for relative poverty governance.In practice,whether fiscal transfer payment can effectively alleviate relative poverty largely depends on its incentive direction and effect.Under the Chinese style fiscal decentralization system,fiscal transfer payment can change the budget constraints of local governments,stimulate the revenue and expenditure decisions of local governments to varying degrees and directions,urge local governments to adjust the level and structure of fiscal revenue and expenditure,and then affect the quality and efficiency of relative poverty governance.Based on this,clarifying the transmission mechanism and transmission effect of fiscal transfer payment on relative poverty is an important topic worthy of study for improving the efficiency of relative poverty governance.This dissertation focuses on the impact of fiscal transfer payment on relative poverty,and is committed to solving the following three problems:First,based on the poverty theory,it constructs the relative poverty measurement index from the mesoscopic perspective,and analyzes the current situation of relative poverty in China,so as to provide a practical basis for this study;Second,according to the relevant theories,clarify the transmission mechanism of the impact of fiscal transfer payment on relative poverty,and carry out the corresponding empirical test,so as to organically unify the theoretical analysis and empirical test;Third,based on the empirical analysis results,it puts forward practical policy suggestions,which provides valuable guidance for building a long-term mechanism to solve relative poverty and improving the efficiency of relative poverty governance.The contents and main conclusions of this dissertation are summarized as follows:First,literature review.This paper systematically combs and evaluates the research literature related to financial transfer payment and relative poverty,so as to determine the research direction of this dissertation.By defining the connotation and extension of relative poverty through conceptual analysis,and using anti-poverty theory,public product theory,welfare economics theory and fiscal decentralization theory,the mechanism of financial transfer payments affecting relative poverty is divided into three dimensions:equalization of basic public services,structure of local financial expenditure and local tax efforts.Secondly,elaborating the characteristics of financial transfer payments and relative poverty in China.Based on the analysis of the relative poverty in rural and urban areas at the provincial level,this dissertation constructs a measure index of relative poverty from a mesoscopic perspective,discusses the distribution characteristics of fiscal transfer payments in China,and provides a realistic basis for the study of the impact of fiscal transfer payments on relative poverty.Thirdly,using empirical methods to test the mechanism that financial transfer payments affect relative poverty through equalization of basic public services.Based on the design purpose of fiscal transfer payments,this dissertation builds a test model of intermediary effect to empirically test the effect of financial transfer payments and the equalization of basic public services on the transmission path of relative poverty.The dissertation found that the improvement of the equalization level of basic public services is conducive to alleviating relative poverty,and fiscal transfer payments promote the governance of relative poverty by improving the equalization level of basic public services.From the grouping estimation results of different regions and different financial capacity,we can see that the mechanism of financial transfer payments affecting relative poverty through equalization of basic public services is significant in different regions and different financial capacity groups,but the transmission effect of central and western regions and low financial capacity groups is more obvious.In addition,there are structural differences in the impact of fiscal transfers on relative poverty through the equalization of basic public services.Fourth,using empirical analysis to test the transmission mechanism of fiscal transfer payment affecting relative poverty through local fiscal expenditure structure.Based on the incentive of fiscal transfer payments to local government expenditure behavior,this dissertation constructs a simultaneous equation model to empirically test the effect of fiscal transfer payments on the transmission path of relative poverty through the structure of local fiscal expenditure.The study found that increasing the proportion of people’s livelihood expenditure in the local financial expenditure structure helps to reduce relative poverty,and fiscal transfer payments suppress the treatment of relative poverty by encouraging local governments to reduce the proportion of people’s livelihood expenditure.Grouping estimates of different regions and financial capabilities show that there are mechanisms for fiscal transfer payments to inhibit the treatment of relative poverty by stimulating the structure of local fiscal expenditure toward productive expenditure in different regions and financial capabilities,but the effect of fiscal transfer payments on relative poverty is more evident in eastern regions and high financial capacity groups through the structure of local fiscal expenditure.There are structural differences in the impact of different types of fiscal transfer payments and local fiscal expenditure structure on relative poverty.General transfer payments can have a negative effect on the governance of relative poverty by encouraging local governments to prefer productive expenditure,while special transfer payments can help the governance of relative poverty by increasing the proportion of people’s livelihood expenditure in the financial expenditure structure.Fifth,using empirical model to test the transmission mechanism of fiscal transfer payment affecting relative poverty through local tax efforts.Based on the incentive mechanism of fiscal transfer payments on local government income behavior,this dissertation constructs a simultaneous equation model to empirically test that fiscal transfer payments affect the transmission path of relative poverty through local tax efforts.The study found that stimulating local taxation has a positive effect on the treatment of relative poverty,and fiscal transfer payments have a negative inhibitory effect on the treatment of relative poverty by reducing local tax efforts.The analysis of regional heterogeneity found that the effect of fiscal transfer payment on reducing local tax efforts and inhibiting relative poverty governance is greater in the central and western regions,and the heterogeneity analysis of fiscal capacity shows that the transmission mechanism of fiscal transfer payment affecting relative poverty through local tax efforts is only significant in the low fiscal capacity group.The estimation results of the impact of different types of fiscal transfer payments and local tax efforts on relative poverty show that general transfer payments have a reverse effect on relative poverty governance by inhibiting local tax efforts,while special transfer payments have a positive effect on relative poverty governance by improving local tax efforts.The threshold regression results show that the effect of fiscal transfer payment on relative poverty is closely related to the level of local tax efforts.When the local tax efforts exceed 87.39%,although expanding the scale of fiscal transfer payment is still conducive to reducing the relative poverty index,this relative poverty governance effect decreases significantly.Sixth,based on the empirical conclusions of the transmission mechanism of equalization of basic public services,the transmission mechanism of local fiscal expenditure structure and the transmission mechanism of local tax efforts,this dissertation puts forward targeted policy suggestions from four aspects:standardizing the fiscal transfer payment system,optimizing the local fiscal expenditure structure,improving the degree of local tax efforts and improving the incentive mechanism of the transfer payment system,so as to improve the quality and efficiency of relative poverty governance.Compared with previous studies,the innovations of this dissertation can be summarized in three aspects:First,enriching the research perspectives.This is mainly reflected in two levels:From"absolute poverty" to "relative poverty".Although poverty has always been a hot topic for scholars at home and abroad,and has formed a large number of valuable research results in poverty measurement,poverty formation mechanism,poverty reduction policy effect evaluation and poverty control measures,most scholars focus on the perspective of absolute poverty.Absolute poverty is related to "basic needs".With the fundamental solution of absolute poverty under China’s current standards in 2020,poverty governance has entered a new stage with relative poverty as the core.How to build a long-term mechanism to solve relative poverty is not only the realistic demand to consolidate the achievements of poverty eradication and meet the people’s needs for a better life,but also an important guarantee to promote the effective connection between comprehensive poverty eradication and Rural Revitalization and finally realize common prosperity.For this reason,this paper is based on the perspective of relative poverty,which is conducive to enriching the existing antipoverty theoretical system.From "microscopic perspective" to "mesoscopic perspective".The existing literature focuses on analyzing the impact of a certain financial transfer payment on the relative poverty of families(individuals).This dissertation constructs the relative poverty index at the provincial level and explores the impact of financial transfer payment on relative poverty based on the "mesoscopic perspective",which can not only supplement the existing research,but also coincide with the logical idea of relative poverty governance.Second,expanding the research content.The existing literature focuses on the effect of fiscal transfer payment on absolute poverty,and the research on the transmission mechanism and effect of fiscal transfer payment on relative poverty is relatively insufficient,which is not conducive to accurately clarify the functional orientation of fiscal transfer payment in relative poverty governance.In view of this,based on anti-poverty theory,public goods theory,welfare economics theory and fiscal decentralization theory,this dissertation summarizes the transmission mechanism of fiscal transfer payments affecting relative poverty as equalization of basic public services,local fiscal expenditure structure and local taxation efforts,and conducts an empirical test on the effects of these three transmission mechanisms.Based on the results of the study,it is of great reference value to put forward specific policy recommendations and to standardize the payment system of financial transfer and to build a long-term mechanism to solve relative poverty.Third,improving the research methods.Most of the existing literatures use the single index of "relative poverty line" to measure relative poverty,and pay attention to the difference analysis between relative poverty and absolute poverty,but ignore the income distribution between relatively poor and non-relatively poor groups in society,which affects the quality of relative poverty index measurement.To this end,this dissertation first identifies the relatively poor population with the incidence of relative poverty,then measures the income gap between different groups with the degree of relative poverty,and finally measures the relative poverty by using the relative poverty index(the product of the incidence of relative poverty and the degree of relative poverty),which improves the accuracy of the index measurement.In addition,compared with the existing research methods focusing on the direct mechanism of fiscal transfer payment affecting relative poverty,based on theoretical analysis,this paper empirically tests the direct mechanism and indirect mechanism of fiscal transfer payment affecting relative poverty by using intermediary effect test model and panel simultaneous equation model,and integrate these two aspects into a unified analytical framework.At the same time,relevant endogenous test,heterogeneity test and robustness test are carried out.This not only provides a new way to measure relative poverty in a comprehensive way,but also helps to further understand the mechanisms by which fiscal transfer payments affect relative poverty.