The Research On Empowering Local Governments To Distribute Bonds

Since the reform of the system of tax distribution of our country in1994, theproportion of the central finance income is increasing day by day, and the proportionof the local fiscal revenue has dropped sharply. At the same time, the proportion oflocal government expenditure is constantly raising. Local governments’ propertyownership and the powers are discordant, which lead the local government into hugefinancial trouble, so various regions and government at all levels in China are facingdifferent degree liabilities problems, and the variety of the debts, the burden of theheavy, are all beyond the general imagination. That shows comprehensive, correctlyunderstanding local place debt problems, especially the exploration and research ofendowing local government borrowed power it is of important theoretical andpractical value.This paper first start with the general theory of endowing local governmentborrowed power, and reasonably interpret the public goods theory and the functions ofthe government division theories and fiscal decentralization theory, then analyzes thenecessity of endowing creditor’s rights of local government based on the threetheoretical basis. Second, expounds on the current local government debt, the totalsize of the basic structure, summarizes the local governments’ debt generalcharacteristics, and comprehensively analysis local government for existing creditor’srights restricted factors and the reasons of the formation of obstacles. After that,summarizes the developed countries’ useful experience on giving local governmentfor of creditor’s rights, and sum up some enlightenment to China. Finally, based onthe discussion above, it is concluded that the endowing creditor’s rights of localgovernment is not only necessary but also feasible basic conclusion, and based on this,the paper puts forward a China should start from the following several aspects togives local government for creditor’s rights: perfect relevant laws and regulations andthe system; Strictly local government debt examination and approval system; Tostrictly regulate the local government debt decision responsibility system; Establishthe local government credit rating system and bond information disclosure system,etc.