Empirical Study On The Shandong’s Municipal Government Size And Structure

Since the tax-sharing system reform in1994,financial system has featured in which financial resources layer upper and responsibilites layer down,the local governments bore more and more responsibilites.Over the past decade,the size of the local government has expanded rapidly in rate of6percent per year,meanwhile,from the aspect of various items accounted for the total financial expenditure/the local government mainly invested in infrastructure construction,the high proportion of capital-construction expenditure and administration expenses squeezed the welfare expenditure out which’s quite different from expenditure structure of the developed courntries.Recently.most researchs focus on the relation between the central-subnational fiscal decentralization and local governments size&structure,few studies make efforts to explain the relation between sub-provincial government size&structure and fiscal decentralization. Municipal-level government is the supreme government below provincial-level and the empirical analysis on which responsilities as well as competition pattrens are different from the provincial-level can supplement and deepen the research on local government size&structure,moreover,The study has important practical significance on the maturity of the sub-provincial fiscal decentralization and optimization of the local government size&structure,according to the mechanism,consequences and proposals on fiscal decentrali-zation influencing the government size&structure.This paper sets shandong province as an example.On the background of the fiscal federalism,we use panel-data of17cities from2000to2009and attempt to make the overall-regression analysis and regional clustering-regression analysis,the major conclusions are:At first,on the background of promotion competition,sub-provincial fiscal decentralization(including revenue decentralization,expenditure decentralization, transfer-payment)expand the municipal-level government size,meanwhile,the cities incline to increase capital-construction expenditure,and reduce welfare spending;Secondly, under the situation of GDP growth rate as the main performance evaluation object, relatively-poor cities may be more motivated to expand the size of government (properly using transfer payments to increase expenditure for capital construction,while reducing administrative costs),in order to improve the economic development.Part one makes a brief introduction of the background and significance of the paper,the definition of major concepts,structure of this paper,methodology as well as innovations and defects.Part two shows domestic and international literature reviews,firstly making a review of the factors which affect the local government size and strcture,secondly,making inductions of the literature which descibe the fiscal decentralization influencing the local government size&structure respectively.at last,making a presentation of the views and methods used by predecessors.Part three presents cunrrent situation of shandong’s municipal-level government size&structure and evolvement of fiscal decentralization,firstly descripting the characters of municipal-level government size&structure,secondly on the basis of the summary of the process of fiscal decentralization after tax-sharing system reform, descibing the cunrrent situation of shandong’s municipal-level fiscal decentralization, in the end, making a summary of the features of the shandong’s municipal-level size and structure.Part four analyzes the mechanism on how sub-provincial fiscal dcentralization influence the local government size and structure,firstly,inducting the features of the fiscal sub-provincial dcentralization,then,showing the theoretical analysis of the mechanism on how fiscal dcentralization influence the local government size and structure.Part five gives an empirical analysis,firstly,making a regression analysis on the overall municipal-level government size and fiscal dcentralization,then, making cluster analysis on the different areas of shandong povince and comparing the results. Secondly, making a regression analysis on municipal-level government structure and fiscal dcentralization.At last,explaining the empirical analysis results reasonably.Part six proposes policy recommendations,including:Accelerating the transformation of local government and establishing a service-oriented local government;Improving the legal framework of fiscal relations between the local government; Improving local officials’performance assessment system;Gradually improving the system of transfer payments;Strengthening social supervision over the size and the structure of local government.