The Study On The Reform Of Province-Governing-County Fiscal System In Hunan Province

Hunan has been beginning the reform of Province-Governing-County Fiscal System in79counties from January1,2010. The reform can not only straighten out the financial relationship among provincial, municipal and county governments and break the disadvantages of city-Governing-County, but also increase the local fiscal revenue and promote the harmonious development of local economy and society to improve the local public service level and quality of resident life.Based on the situation of Hunan province, this article combines the theory and empirical analysis method to make a initial research about the Province-Governing-County Fiscal System, and to offer some suggestions to ease county financial difficult and strengthen county economies. This paper quotes fiscal decentralization theory, flattening organizational structure theory, regional imbalance development theory and the principal-agent theory to prove the feasibility of the reform. It summarizes the experience of the reform of Province-Gover ning-County Fiscal System and fiscal management of foreign classification, and briefly introduces the progress of the fin-nancial system reform in Hunan province since the Tax-sharing system reform, and accounts for the overall situation of the reform of Province-Governing-County Fiscal System in two years. In the meantime, it uses the endogenous economic growth theory to build panel fixed effects model in order to study the county of fiscal decentralization effects on its economic growth in Hunan on income decentralization, spending decentralization, self-sufficient decentralization aspects. On the basis of these studies, it puts forward some specific measures that improving county fiscal decentralization levels, and speeding up the supporting system reform, so as to promote the reform of Province-Governing-County Fiscal System.