The Research On The Control Of Local Government Debt Scale

After the outbreak of international financial crisis of2008, in order to effectively cope withthe impact of the international financial crisis on our country’s economy, reduce the damageto the real economy in our country by, and in order to better growth, promote employment,our country implemented the4trillion economic stimulus plan, effective control of adangerous situation, to ensure the fast yet steady economic growth. But at the same timeunder the4trillion economic stimulus plan of the central, ushered in an unprecedentedinvestment opportunities in local government, which creates a local government debt rosesharply. On the one hand, the local government debt effectively cope with the internationalfinancial crisis, to avoid a hard landing of the economy in our country, the better play to therole of the growth; on the other hand, according to the2011audit of the audit results, from1997to2010, average annual growth rate of over30%, local government debt scale due to theexpansion of the scale of local government debt accumulated debt risk, to our countryeconomy long-term stable and rapid development of the buried under the great hidden trouble.It is need to find an effective method to control of local government debt scale rationally.Therefore, in-depth study of local government debt scale and the relationship between localeconomic development, and further construct an optimal scale model of local governmentdebt is particularly urgent and necessary.This paper’s main research mentality and the method is: the first part, the selected topicbackground, research significance of this article summarized on the basis of the relatedliterature at home and abroad research of local government debt has carried on the systematicreview and comb. The second part, the related theory of local government debt has carried onthe brief analysis and summary. The third part, on China’s local government debt, status,function and existing problems of the kinds of makes a detailed analysis and summary, and onthe positive effects and negative effects two aspects to our country local government debt andlocal economic and social development made a general analysis. The fourth part, with the aidof econometric models, by the use of large amounts of data and graphs, the local GDP growth,the added value of the third industry and urbanization level, this three refinement indicators,to make an empirical analysis on local government debt scale and local economicdevelopment, and further build the optimal scale model of local government debt. The fifth part, finally we put forward the effective policy suggestions to control of local governmentdebt scale in our country.Through research we can draw the following conclusion: overall, from1997to2007, localgovernment debt scale and local economic development presents a relatively stable relevance,but starting in2008the correlation, the dramatically decline in2009. This is caused by theexcessive expansion of the local government debt scale, the optimal scale model of localgovernment debt has proved it true. Therefore, according to the optimal debt scale model, wecan calculate for each year of each local government can be raised in debt ceiling value, andthe strict supervision and execution. Therefore must strictly control the scale of localgovernment debt and keep the reasonable debt growth, to avoid the dangers of excessive blindexpansion of local government debt scale. It’s need to create a debt from the rigid budget andstrengthen the institutional constraints, optimizing the structure of debt capital, expand thelocal government financial resources and improve the use efficiency and reduce the spendingpressure and so on three aspects.