| Investment, exports and consumption are considered as the driving force of the economy of China. However, for a long time, the contribution of investment and export to economic growth rate higher than the consumption, the consumption rate is lower than the average level of the world. According to international experience, the resident consumption rate in a considerable part of the world and regional are more than 60%. In order to improve the mode of economic development, improve the quality of economic development, the Chinese government has implemented a series of fiscal policy, while the government receipts is reducing because of the structural tax reduction policy, the contradiction between fiscal revenue and payment is suddenly revealed day by day. Government expenditure as an important factor affecting the consumer, it is necessary to adjust the expenditure structure to better stimulate consumption growth. Therefore, the government needs to consider decentralization, reasonable adjustments to the expenditure structure, to improve the consumption level of residents, promoting healthy economic growth.Adjusting government expenditure structure to promote the level of consumption needs to consider fiscal decentralization factor. However, there is little comprehensive consideration fiscal decentralization, the structure of government expenditure and household consumption, this paper attempts to supplement the existing research. First, the paper constructs a model of endogenous growth theory, fiscal decentralization, government spending into resident utility function and the production function, was found on a balanced growth path, governments at all levels has an optimal level of decentralization and optimal expenditure structure, making the fastest growth in consumption. Then, we used provincial panel data from2000 to 2013 for the empirical analysis, the researchers found that fiscal decentralization system in China will directly contribute to improve the level of consumption, but also can have an impact through the structure of government spending on household consumption indirectly, such as fiscal decentralization by promoting economic constructive expenditure, general expenditures channel to improve the consumer level, the impact of general expenditures channel is not significant. Finally, based on the results obtained by empirical research, policy recommendations for reference points in order to take advantage of fiscal decentralization, through the rational allocation of government resources, promote the transformation of economic development and restructuring of the economy. |
