The Study Of Special Transfer Payments Reform

Special transfer payments is an important tool to realize the specific intention of central government. It is an important form of China’s transfer payment. In 2014, the scale of our country’s special transfer payments is 1.956922 trillion yuan, accounting for 41.8% of the total amount of transfer payment. With the increasing of special transfer payments, problems in usage and management of special transfer payments start to appear. Special transfer payments reform becomes the pressing requirement for raising the level of management now. And under the "New Normal", China now is facing with dual pressure in terms of public finance, the slow of fiscal revenue growth rate and rigidity of expenditure. This also requires China to reform special transfer payments system.China’s special transfer payments has many problems in distribution, usage and management. So if we design the reform simply based on those problems, we’ll probably do not know how to start the reform. The bright spot of this paper is to research the issue under the theory of financial resources, powers and expending responsibility’s match and successfully jump out the "case by case" framework. The most fundamental problem the reform should solve is the matching problem of financial resources, powers and expending responsibility. Only seize the essence of the reform can we correctly design and promote the reform. Longitudinal fiscal gap is caused by the mismatches between government revenue and expenditure needs. Under the fiscal decentralization system, financial-rights are centralized in central government and powers are decentralized to local government, thus longitudinal fiscal gap is a normal phenomenon in local government. Longitudinal fiscal imbalance refers to the mismatch between financial resources and powers after the redistriction of expending responsibility and inter-government transfer payments or government debt. It shows the related financial system, which includes transfer payments system, is imperfect. To match financial resources, powers and expending responsibility we can either redistrict the financial resources or redistrict powers, expending responsibility. The reform of special transfer payments is the application of the first method. The reform also needs other supporting measures, such as reasonable division of powers and expending responsibility between governments, reasonable defines the boundary between government and market, etc. These supporting measures will help to redistrict powers, expending responsibility between governments.There are 5 chapters in this paper. Firstly, discuss the theory of special transfer payments reform and confirm the principle of the transfer payment type should match with the transfer payment goal. Secondly, introduce the existing exploration practice of our special transfer payments reform and point out that the inherent problem the reform should solve is the matching problem of financial resources, powers and expending responsibility. Thirdly, introduce the foreign experience in special transfer payments reform. Finally, propose the overall goal and basic principles of the reform and put forward some policy suggestions on how to deepen the reform.