Constitutional Economics Thought Of Buchanan And Chinese Financial Deficit

As one of the public choice school representatives, Buchanan has got 1986 Nobel Prize for economics because of the contributions made in public choice. He has made the lecture entitled The Constitution of Economic Policy while receiving this reward. This speech seems to be intending to desalinize the color of public choice, we can find out Buchanan has transferred the study emphases from public choice to constitutional economics through the speech. Buchanan may achieve great academic success in the research of constitutional economics, and he has made the contributions that can't be evaluated to the setting-up and development of constitutional economics. Constitutional economics researches commenced from the seventies the 20th century, and it derived from public choice. Buchanan thinks constitutional economics is the advanced stage of development of public choice. His explanation to constitutional economics is: What is studied on constitutional economics directly is the operation nature of rules, the individual's interactive institutions among them and the courses that these rules and institutions are chosen. Study the rules to restrain personal behavior in constitutional economics, study the rules to restrain collective behavior too. The focal point is to study the rules to restrain government's behavior. Constitutional economics has sure theory significance in solving the government failure, and has also applications in tax revenue, financial deficit and constitution reform. This paper introduces Buchanan's constitutional economics firstly, then appraises to it, and discusses the application of constitutional economics in our country's financial deficit finally. The full paper divides into six parts altogether, the first four parts introduces the system of Buchanan's constitutional economics, in the fifth part it is the appraisal on Buchanan's constitutional economics, the last part is to discuss the application in financial deficit of our country by constitutional economics that is combined with the state of financial deficit of our country. In the first four parts, the first part and the second part are mainly to introduce the assumptions of the constitutional economics of Buchanan. Constitutional economics of Buchanan can set up depending on three assumptions. One is the methodological individualism, one is the " homo economicus " , and another is the political activities as exchanges. We introduce prime two assumptions briefly among the first part, two assumptions reach jointly called " individual model ". The methodological individualism in " individual model " is the analytical method that is thought to be most appropriate, the most effective society realizes from study on individual phenomenon or course. The methodological individualism regards individual as the foundation analyzed and standardizing. From individual preference model, it isn't unable to produce value standard of society, don't exist society or collective value maximize, don't exist various kinds of improvement added with society welfare that can be measured, so it sets the methodological collectivism against. " homo economicus " hypotheses is another component in " personal model ", and it's the foundation of economics analyses, emphasizing the personal self-interest and rational behavior, everybody carries out the cost –benefit analysis what the action brings. Buchanan thinks the government officials are " homo economicus " like that too, and analyze government's behavior starting with " homo economicus " hypotheses. Explain the reasons for adopting " individual model " from symmetrical theory, Gresham's law and wooden barrel principle finally.In the second part, we see constitutional economics from the visual angle of the contract. At first, it introduces the third hypotheses -political activities as exchanges with that constitutional economics can set up. Political course and market course can be regarded as the economy about the trade too; they have the common exchange with the interests, the same trade motives and trade activities. But they have some differences on trade subject, media of exchange and voluntary degree. Economics as studying exchange science, from the point of view of contract, judged standard of efficiency adopts Pareto rule no longer, but unanimity rule. It refers to a decision or the proposal that must be agreed with all members in the collective or have nobody to object to, can just be passed. Because constitutional economics mainly researches the restraints in government, then we discuss the process that the country forms under the contract angle. See how the country produced from " Hobbesian jungle ". We analyze two stage contracts mainly in the third part. Because people's behavior is mainly made up of two parts, one is the behavior to choose the rule; the other is behavior of the choice that base on the premise that the rule is set. Just like playing poker game, it should confirm that kind of playing method, then deal out the cards and begin the game. To confirm playing method is the behavior that choose rule. After playing method confirmed, it is behavior of the choice on the premise that the rule is set when deal out the cards and begin game. These two kinds of behaviors are at two different stages, the stage in which to confirm rule namely constitutional stage and the stage in which to go on behavior under the rule set namely postconstitutional stage. It improves people's utility through confirming the property right at constitutional stage; it promotes people's utility level further through the exchange of the personalgoods and public goods at postconstitutional stage. The analysis on government is to start with these two stages, and the government's function is divided into two parts accordingly, protective state and productive state. The fourth part tells the restraint of government's behavior mainly. Analyze the behavior of government under the unconstrained condition firstly. The government will often cause government's scale to expand constantly, government's budget is being strengthened constantly, and the corruption may be more serious in case of not restrained. So it should exert certain constraint to government's behavior, in this way the government could fulfil its own function very well. These constraints mainly include fiscal constraints, generality and non-discriminatory constraints, exit options constraints and procedural constraints. The fiscal constraints include the constraints of tax revenue by limiting the tax bases and the tax rate structures, the constraint of expenditure by earmarking and the constraint of the budget balance. After introduction constitutional economics system of Buchanan, carry on brief appraisal to it in the fifth part. At first emphasize the important meanings of constitutional economics. These are to come back to classical economics, to emphasize the function of the constitution and to resolve the government failure. Point out the deficiencies in " homo economicus " hypothesis, unanimity rule, state theory, paying attention to course and objective examination. The last part is to discuss the application in our country's financial deficit of constitutional economics. Introduce the financial state of our country briefly at first. After adopting " tax-sharing system ", the financial deficit state of the local government begins to worsen; the application of the positive financial policy has strengthened the degree of the deficit further. Then use...