The Local Fiscal Expenditure And Economic Growth In The Chinese Transition Period

As for the affection of government public expentiture to economy growth,there are lots of controversy,and the opinions on effectiveness of government public expenditure are not coincided too.China obtained tremendous success by reform and opening policy in the past,and the Chinese local government played an important role undoubtedly.Alone with the economy system transform and public finance system reform, the changes of local fiscal expenditure and the scale has an increasingly important influence to economic growth.Therefore,the research of the affection of scale and structure of fiscal expenditure on economy growth is certainly of great academic and practical importance to economy development rapidly of China.The paper was divided into six parts : the part of the introduction include the research background ,review and comments on foreign and domestic literatures,content and hypothesis. Chapter 1 is the theory of the whole paper. This part commentated briefly on relationship of public expenditure and economy growth firstly, then in order to build a theoretical foundation for the research on dynamic relationship of GDP and expenditure of Chinese government. Chapter 2 have a statistical analysis on local fiscal expenditure in size and structure. Chapters 3 and 4,according to the indexes,theory and model,chose data from 1995 to 2005,used the Panel Data analysis method to inspect the relationship between fiscal expenditure and economy growth. The result showed that,the scale of fiscal expenditure of local government is too large,and the structure of fiscal expenditure is irrational. Especially the scale of the expenditure of economic construction is too large. And the scale of expenditure of culture, education, health and scientific research is smaller, which palys an important role in improvment of the efficiency of economic growth. Finally this paper pointed out the relevant policies and proposals.The innovation of this paper consists in following aspects.The paper considered the combined impacts of fiscal expenditure's scale and structure of local government,and classified the categories of expenditure to different and diverse types. In particular, after the study of the impact of local fiscal expenditure on the size and structure to the rate of economic growth, we further studied its impact on the efficiency of economic growth,the research obtained even more comprehensive conclusion than other researches.