Fiscal Decentralization,Competition Of Promotion And The Rise Of Residential Price

Reviewing the literatures on house price from both china and abroad, we came to conclusion that analysis on house price has focused on the equilibrium worked out by demand-supply mechanism, an internal factor imposing direct and decisive effects and economic fundamentals, an external factor imposing indirect effect. Indeed, as far as theory available concerned, we have solved the question partly. But abnormal house market development and meaningless regulation on the market do evoke questions that why regulation by perspectives mentioned before on the market has achieved nothing, even making price higher, if demand-supply and economic fundamental determines price trend.According to lots of literatures, the specific political structure and economic development mode is behind what has happened in the market. The thesis has taken into account Chinese economic decentralization and political centralization, combined with incentives for local government and officers, to describe the relationship between price rising and promotion for officers and fiscal decentralization, based on the local governmental behavior mode and empirical tests.As the result goes, the competition for promotion under soft constraints and fiscal decentralization has made local governmental motivated to go for land finance and preference for real estate, by monopolizing the land market and limiting land supply. So necessary is restructuring local government competition system, allocating rationally financial power for local government, hardening economic and political aconstraints and increasing land supply.The whole thesis is devided into four parts, of which the first one is about the subject we has dealt with and the meaning, generalizing the research on the subject and providing the structure of the paper; the second is about the theoretical achievement on public choice, reviewing the change history of finance system and government regulation system and focusing on the switch of local governmental role and of governmental regulation; the third is about building the frame of institutional behavior, describing the local governmental behavior and misbehavior arousing rocketing up of house price under the background of fiscal decentralization and promotion competition; and the last one is about empirical test based on GMM model with data both on national and district scale.