The Research Of Intergovernmental Fiscal Transfers And The Behavior Of Local Fiscal Expenditure

Since the Chinese government proposed the construction of the public finance system which matches with the market economy structure in 1998, the public finance system construction has made some achievements. The local governments charged with the responsibility of public service provision. Improving the efficiency of fiscal spending and optimizing the structure of financial expenditure helps the local government high efficiently play the role of the government functions. Since the tax system reform, the Central and local fiscal revenue and expenditure are asymmetric, Revenue and expenditure between the various regions are quite different, Central Government, through the intergovernmental fiscal transfer payment to resolve the vertical fiscal imbalance and horizontal fiscal imbalances. Transfer payments constitute a large proportion of local fiscal expenditure, it must have a major impact on Local fiscal expenditure structure. Does the using of the transfer payments by local government meet with standards of fairness and efficiency? Whether complies with local economic development? So this article is from this point to study the relationship between of transfer payments and local government expenditure and to analyze of the use of local funds. Using the theoretical model analyzed how the negative facts to effects the efficiency of the transfer funds. Through the empirical model we Study the relationship between the fiscal expenditure structure and the transfer payment and offered some policy recommendations on how to improve the efficiency of fiscal fund using and optimize the structure of fiscal expenditure.The paper is divided into five parts. The first part is the introduction part. Describe the background and significance of the topic, Review of relevant research at home and abroad. The second part described the current situation of the structure of local government expenditure and analyzed of the expenditure structure distortions that may exist. The third part used the Game model to analyze how the central government through the transfer payments structure designing to guide the fiscal expenditure of local government, and analyzed the factors which impact local fiscal expenditure efficiency. The fourth part using the empirical model analyzed the impacts of fiscal transfers and fiscal expenditure structure. The fifth part is the conclusions of this thesis, we offered some policy recommendations on how to improve the efficiency of transfer payments and expenditure structure.