Research On The Effectiveness Of Local Financial Expenditure

For a long time, the contradiction between financial revenue and expenditure has stood out in China and the finance in China is typically regarded as "Payroll Finance". Financial authorities at all levels, either central or local ones, have obviously adopted a fiscal policy, paying more attention to the revenue, yet less attention to the expenditure. However, with the expansion of the expenditure scale and the transition of public finance's function, the fact that the management of the expenditure lags behind has given restrictions to the stability and efficiency of financial work. Therefore, in recent years, the voice of strengthening the management of the expenditure and improving its effectiveness is more and more powerful, which points out an important way to solve problems both on public finance and government efficiency.In author's opinion, the effectiveness of financial expenditure is a relative concept, which reflects a kind of agreement between the result afterwards and the target set beforehand. And the agreement can be measured by comparison. The effectiveness is influenced by various factors, mainly including policy objectives, revenue structure, distribution and spending structure, financial capacity, budget plan, budget implementation, budget supervision, etc. Those factors not only exert influences on financial expenditure independently, but also on overall effectiveness. The paper has selected some areas of fiscal expenditure, such as education, science and technology, administrative management and so on, and taken Zhejiang province as an example to analyze its current performance of the fiscal expenditure effectiveness, so as to find out some proper ways to improve it.Based on the theories of Information Economics, Public Economics, Public Management as well as Public Finance, the author tries to put forward relevant strategies and suggestions both from the theoretical and practical aspects. According to the basic conclusion of Information Economics, any possible system or policy should meet individual's "incentive compatibility constraint". In accordance with...