Rent-seeking Constraints And Sustainable Fiscal Development

Currently,economic growth has slowed down in China,the economy has entered the new normal,and economic development has gradually changed from high-speed growth to high-quality development.In addition,in recent years,the intensity of tax reduction and fee reduction has been increasing,and the growth rate or scale of China’s fiscal revenue has been slowing down.However,in order to cope with the negative effects of the epidemic of COVID-19 on the domestic economy and society,and the realization of common prosperity,both cannot do without the regulation and guidance of fiscal policy.So these have led to a sustained increase in fiscal expenditure.Therefore,it can be seen that under the background of growth rate of fiscal revenue downward and increasing fiscal expenditure continuously,the risks faced by China’s finance are becoming more and more complex.It is not only important but also urgent to realize the sustainable development of finance.Rent-seeking constraint is one of the important attributes of government officials as direct managers and users of financial funds.The rent-seeking constraint may have an important impact on the revenue and expenditure of financial funds,and then affect the sustainable development of finance.From these,this paper will comprehensively study the impact effect and mechanism of rent-seeking constraints on China’s fiscal sustainable development,and explore the effective path to realize China’s fiscal sustainable development.The main research contents of this paper are as follows:Theoretical analysis show:firstly,this paper defines the connotation of fiscal sustainable development as the sustainable development of fiscal revenue,fiscal expenditure and local government debt,and constructs a theoretical analysis framework of the impact of rent-seeking constraints on fiscal sustainable development.Firstly,based on the"A-S tax evasion model"constructed by Allingham and Sandmo（1972）^[1],the factors such as rent-seeking constraints and tax collection and management are included to establish a theoretical analysis framework of the impact of rent-seeking constraints on the sustainable development of fiscal revenue;Secondly,introduce fiscal expenditure structure distortion and establish a theoretical analysis framework of rent-seeking constraints affecting the sustainable development of fiscal expenditure;Finally,introduce the enthusiasm of developing fiscal expenditure and the distortion of fiscal expenditure structure,and establish the theoretical analysis framework of rent-seeking constraints affecting the sustainable development of local government debt.Empirical research shows:firstly,based on the micro enterprise data and macro city data,this paper uses the difference-in-differences（DID）method to study the impact of rent-seeking constraints on the sustainable development of fiscal revenue.It is found that the increase of rent-seeking constraints increases the rent-seeking cost of enterprises,reduces tax avoidance and promotes the sustainable development of fiscal revenue.On this basis,the mechanism test of this paper finds that rent-seeking constraints will affect enterprise tax avoidance through tax collection and management,and in areas with weak tax collection and management intensity,the strengthening of rent-seeking constraints will crack down on enterprise tax evasion more obviously.In addition,based on the analysis at the micro enterprise level,this paper verifies the impact of rent-seeking constraints on regional tax revenue from the macro regional level,and finds that rent-seeking constraints do increase the tax revenue of local governments at the macro level.Combined with the research at the micro enterprise and macro regional levels,it is found that the increase of rent-seeking constraints helps to promote the sustainable development of fiscal revenue.Secondly,this paper also empirically studies the impact of rent-seeking constraints on the sustainable development of fiscal expenditure.The study found that rent-seeking constraints help to improve the efficiency of fiscal expenditure and promote the sustainable development of fiscal expenditure.Further research shows that the impact of rent-seeking constraints on the efficiency of fiscal expenditure is mainly realized by reducing the proportion of productive fiscal expenditure in total fiscal expenditure and correcting the distortion of fiscal structure.Rent-seeking constraints force government officials to invest more fiscal funds in the field of consumer production,reduce unnecessary investment in productive activities,increase the marginal income of fiscal funds and improve the efficiency of fiscal expenditure,and promote the sustainable development of fiscal expenditure.Finally,this paper focuses on the impact of rent-seeking constraints on the sustainable development of local government debt.The study found that the strengthening of rent-seeking constraints did effectively reduce the debt ratio of local governments.Secondly,taking the fiscal expenditure structure distortion and fiscal expenditure scale as the mechanism variables,the empirical test shows that rent-seeking constraints effectively reduce the debt ratio of local governments by reducing the scale of fiscal expenditure on the one hand and correcting the fiscal expenditure structure bias on the other hand.Finally,this paper selects fiscal decentralization and tax competition as regulatory variables.The results show that in areas with high degree of fiscal decentralization,the effect of rent-seeking constraint on the reduction of local government debt ratio is more obvious;In areas with high tax competition,rent-seeking constraints have a more obvious effect on the reduction of local government debt ratio.Based on the research conclusion,this paper obtains some policy enlightenment,in order to provide some policy reference for realizing the sustainable development of finance under the background of the slowdown of the increase of fiscal revenue and the rigid increase of fiscal expenditure.