An Analysis On The Fiscal Decentralization And Unbalanced Growth Of Regional Economic

Fiscal decentralization is an institutional reform which has a huge impact on regional economic structure in China. On the one hand, it has indirect effects to the local economy.On the other hand, because of the competition among them, the situation of development in regional governments are different, even though the endowment of economic resources are same.Accompanied with the process of fiscal decentralization, while the national economy get fast development,the absolute gaps among regional economies become more obvious,but the relative gap is shrinking. In order to study how the differences of the ability of the regional financial lead to the imbalance of economic development, this article explores the differences of the regional financial resources from fiscal revenue and fiscal expenditure. Describing the horizontal competitions among local governments and the mechanisms of the fiscal decentralization to the unbalanced regional economic development.While this article investigating the fiscal decentralization,it specifically from two angles of property rights (fiscal revenue) and object rights (fiscal expenditure). Building the formulas of fiscal decentralization according to analysis the study for the studies in the domestic and international researches. Calculating the level of revenue and expenditure decentralization in the Eastern,Mid and Western according to intercept the panel data of the29provinces, municipalities and autonomous regions in China from1994to2011. Firstly,according to the unit root test for panel data of the region’s economic growth (Y), the level of fiscal decentralization (FDREV and FDEXP) as well as the control variables (X) and their first order difference, and then determine whether they smooth or not. Doing the co-integration test for each variable after determining the variables are integrated of order one. And then, the paper presents the relevant theoretical models and empirical model for regression analysis. As a result, the revenue and expenditures decentralization in local governments have a different impact among Eastern, Mid and Western. Revenue decentralization has a lighter impact on the differences of economic development, while the expenditures decentralization lead to regional differences by its different impacts on different areas.Finally, in order to further deepen China’s financial reform, promote the balanced development of regional economy, the paper made several policy recommendations:Changing the assessment methods to the governments, building the public service government. Clearing the scope of liabilities of property rights and objects rights,realizing the coordinated development of them. Deepening reform and transferring payment system. Promoting inter-regional equalization of public services and so on.