Effect Of T Local Fiscal Expenditure Structure On Economic Growth

The tax-sharing system reform in1994is a milestone of China reform and opening processes of30years. After the reform of the tax-sharing system, fiscal system changed, the Central and Local fiscal expenditure structure have taken great changes, the effect on economic growth has changed too, local finance expenditure play a more and more important role in their economy development. First of all, this text makes a study on the relationship between finance expenditure structure and economy development in theory, basing on the former documents. And next, quantitative analysis the present state of local finance expenditure and economy development according to the regional difference. Last, on the basis of the above steps, taking the advantage of provincial Panel Data from1994to2011, empirical analysis the relationship between local finance expenditure structure and economy growth through regression analysis with the methods of spatial estimate eliminating spatial correlation. Finally this text comes to the following conclusion:local economy development greatly influenced by its finance expenditure structure; but the local fiscal expenditure structure is not reasonable, and unreasonable local fiscal expenditure structure restricting economic growth effect; Subregional perspective, the structure of fiscal expenditure in the three regions have different effects. In economic construction expenditure:the eastern region shown significant negative correlation, the middle region also shown negative correlation but not significant, while the western region shown significantly positive correlation; in education and healthy spending:East and middle area shown weak positive correlation, only the western region shown significant positive correlation; in administrative expenditure:negatively related to the eastern region, the middle region shown positive correlation, but not significant, but the western region significantly positive correlation; in defense spending:the three regions have shown positive correlation, but only in the western region significantly; in social security expenditure:the eastern region shown negative correlation, in the west and middle area present positive correlation, but only the middle region significantly. At the end of the text, the corresponding conclusions are approached and suggestion of optimizing fiscal policy is invited combined with the requirement of public finance construction.