A Study On Shanghai's Departmental Budget Reform

With the further development of socialist market economic structure, the traditional fiscalbudget system increasingly mismatches the requirements of market economic system in China.Since the late 1990s, China started a budgetary management reform based upon the compilation ofdepartmental budget. Critical in the building up of the public finance system, the departmentalbudget system is a cornerstone underlying the public finance framework.This article introduces to the background against the national departlnental budget reform,the basic concepts of departmental budget and the research implications. Taking Shanghai as astudy object, this paper elaborates the progresses and achievements made during the departmentalbudget reform. With regard to budget planning, specifically, the compilation method has beenimproved, the planning time elongated, the items thorougbly described and the procedurenormalized. With regard to internal control of the departmental budget reform, it has beenswitched towards an effective trichotomy of planning, execution and regulation. With regard toimplementation conditions for external control, the transparency and openness has been enhancedto some extent. From a technical and institutional point of view, the paper also points out theexisting problems and drawbacks and analyses the reasons. Drawing upon the sophisticatedmethods and experience from western developed countries including the US, this article exploresWhat lessons and ideas China can learn from. In conjunction with the knowledge of publiceconomics and public management, the paper sets forth that China might wholly adopt thezero-base budget method, implement performance budget and compile the comprehensive budget.The Nation should improve its budget management techniques and make extensive its budgetarylegal system. It is imperative to strengthen the role played by the National People's Congress inthe surveillance of public budget planning and implementation. At last, the article elaborates themeasures to set up a check and balance budget system in China.Closely linked with the practical situations of the departmental budget reform in Shanghai,this thesis analyses the existing problems in the departmental budget reform and proposes thesolutions and measures to improve the departmental budget system. The purpose of this study is tosummarize the key points and experience to facilitate departmental budget reform in Shanghai.