The Impacts Of Local Fiscal Autonomy And Fiscal Expenditure Structure On Urban-Rura Income Disparity In China

Since China’s reform and opening up, economic growth and the urban and rural residents’ income level continues to improve, At the same time, the widening income gap between urban and rural areas has become an important challenge faced by Chinese government. City-biased policy make enormous benefits for urban In such aspects as public investment, health care and education,and give rise to extreme imbalance between urban and rural economic growth, as a result, the income gap between urban and rural areas continue to expand. In 1994, China implemented the financial distribution management system, fiscal power transfers from central to local government, make local governments take the larger responsibilities for public input, health care and education, etc. And in this system, local government fiscal autonomy was further promoted, the bias fiscal input has becoming an important way of maximizing their own interests of local government. Then, the improvement of local government fiscal autonomy and the biased fiscal expenditure structure will produce what kind of influence to the income gap between urban and rural areas, this subject has draw high attention of scholars.Based on research related literature and theory achievements about the impacting of local fiscal autonomy, fiscal expenditure structure on the income gap between urban and rural areas both at home and abroad, via the combination of mathematical analysis and normative analysis, qualitative analysis and quantitative analysis methods, to explore local fiscal autonomy and fiscal expenditure structure give the dynamic influence on the urban and rural income gap under the system of financial distribution, and further discusses the suggestions about how to narrow the income gap between urban and rural areas when local fiscal autonomy ensured. Research conclusions are as follows:①The income gap between urban and rural areas expending is a continuous process, and itself has no reverse correction mechanism. If the government ignores the fairness of the economic development, continue to implement urban bias policy and pursuit of short-term economic interests, the income gap between urban and rural areas will continue widening.②Enhanced local financial autonomy has the function of narrowing the income gap between urban and rural areas, and the short is better than the long term. Chinese government should deepen the reform of the financial distribution system, guaranteed the local governments have some fiscal autonomy, so local finance makes use of flexible and timeliness, giving full play to financial utility.③Local fiscal expenditure scale enlargement is increasing the income gap between urban and rural areas. Among local fiscal expenditure, economy spending accounts comparing the role of the income gap between urban and rural areas affected by the time dimension, and the influence in short term is larger than the long term; Social spending accounts alleviate urban and rural income gap has positive effect, and effect the larger efforts; Maintenance spending accounts has no significant impact on the income gap between urban and rural areas.④The suggestions about how to improve local fiscal autonomy and narrow the income gap between urban and rural areas : Governments at all levels should specify their scope of financial revenues and expenditures, ensure the flexible of local government fiscal, to full play of financial function; The local fiscal should increase social spending and economic spending in rural areas, to provide better development environment for the rural economy, alleviate the current urban and rural residents income gap.