An Emepirical Study On Poverty-Reducing Effects Of Public Expenditure

Poverty is one of the incurable diseases which all countries are committing to solve, it is also the short board for building a well-off society in China. In recent years the Chinese government has been committing to reduce poverty from the aspects, has made remarkable achievements, but still faces severe challenges. Poverty reduction has been dominated by the government, the most effective way to reduce poverty for government is public expenditure, the government can adjust the structure of public expenditure to realize policy tilt, so as to achieve the effect of poverty reduction. in China promotes the process of poverty reduction with poverty counties as a unit, which can optimize allocation of limited resources. Therefore, the public expenditure of poverty counties can reflect the implementation of policy and the efforts of poverty governance in poverty areas. Anhui Province locates in the hinterland of China with relatively weak economic. its poverty population mostly concentrates in the contiguous poverty-stricken area of Dabble Mountain. poverty counties have several characteristics, such as inconvenient transports, resource shortage, harsh environment, low level of urbanization, weak foundation of economic development and extreme poverty, which has a certain representation. Under this background we study the poverty-reducing effects of public expenditure in Anhui Province, which can not only conducive to slow the poverty of Anhui Province, contribute to improve the well-off society, but also be an example for other provinces to reduce poverty.This article adopts combination of theory and empirical to study on poverty-reducing effects of public expenditure in Anhui Province, starts from the situation of poverty and public expenditure of Anhui Province to analysis mechanism of public expenditure on poverty-reducing. This article argues that on the one hand, public expenditure can directly increase the poor income or improve the ability of poverty people to obtain income, which has a direct effect of poverty-reducing, on the other hand it can by promoting economic growth to reduce poverty, which has indirect effect of poverty-reducing. On the basis of theoretical analysis, this article constructs a simultaneous equations model for empirical research, comes to the following conclusions: firstly, medical expenditure, social security expenditure, agriculture expenditure can increase the income of rural residents in poverty counties, have good direct poverty-reducing effects, but the direct poverty-reducing effect of education expenditure is not significant. Secondly, economic growth in poverty counties still has a significant poverty-reducing effect. Education expenditure, medical expenditure and agricultural expenditure all can significantly promote economic growth in poverty areas, and promote poverty reduction through economic growth, which has an indirect effect on poverty-reducing. The social security expenditure indirect poverty-reducing effect was not significant. Thirdly, the poverty-reducing effect of poverty counties agriculture growth is not significant, while education expenditure and agriculture expenditure have not been able to play the role of promoting agricultural growth. Finally, according to the results of empirical study, this article put forward policy recommendations to further improve poverty-reducing effects of public expenditure in Anhui Province: increasing public expenditure on education and promoting the reform of the education system; improving the social security system and strengthening social security input; increasing investment in public health care and promoting the development of medical and health services; increasing spending on agriculture and promoting the steady growth of agriculture.