The Effect Analysis Of Local Government Transfer Payment In Social Security

Since the reform of the revenus-sharing in1994, the financial and personnel responsibilities in China are unclear. Because of that, the paper studies how the central policy was implemented in different local governments by using Multivariate Linear Regression of the data of Jiangxi province from1995to2005. And it also tries to understand the effect of the fiscal transfer payment used in social security. In addition, the paper also analyses what local government prefers to expend. The result shows that the fiscal transfer payment has play an important role in local finance, especially in the expenditure of social security. And it's also a strong backing of the local social security. And the final finding shows:although the local government has to consider the multi-assessment mechanism, it would rather pay close attention to promoting the economic development than keen on the development of social security. Secondly, the local government would like to make a good use of the transfer payment in social security. So the found findings:the more fiscal transfer payment in social security, the more expenditure on local social security.At last, there are some recommendations about the expenditure of social security in local government, such as, establishing a scientific public finance expenditure system, regulating the distribution of the local fiscal transfer payment, expanding citizen participation and strengthening the management of social security expenditure.