| Since the 17 th National People’s Congress(NPC)of the CPC put forward "to accelerate the improvement of the people’s livelihood as the focus of social construction",improving the people’s livelihood has increasingly become the focus of our work at all levels of government.Especially after the outbreak of the global economic crisis in 2009,in the name of improving people’s livelihood,local governments issue urban investment bonds on a large scale,in full swing for urban construction.Urban investment bonds have gradually become an important tool for all levels of government to achieve security growth,expanding domestic demand,and benefit people’s livelihood.Chinese local governments,which have the characteristics of “development” and the tendencies of “corporatization”,have the inherent motivations to pursue political and financial incentives,so that the livelihood of people cannot be their endogenous development targets.As an important financing instrument of regional financial platform companies,the urban investment bonds must be an important means for local governments to achieve their developmental goals,so they have an endogenous preference for productive expenditure,and different levels of local governments prefer different incentives,so the productive expenditure bias of urban investment bonds exists level differences.The study found that under the political and financial incentive system,the local governments have obvious characteristics of development,and urban investment bonds exists productive expenditure bias.Empirical tests based on general ordered logit model and 4642 urban investment bonds issued from 2006 to 2014 provide robust evidences for the productive expenditure bias’ existence,determinant factors,spatio-temporal and administrative level differences.The main results are as follows: Firstly,under the political and financial incentive system,the local governments have obvious characteristics of development,and urban investment bonds exists productive expenditure bias.Secondly,Different administrative levels of local government on the political incentives,fiscal incentives are different and thus lead to the difference of the productive expenditure bias of urban investment bonds.Provincial governments prefer political incentives,the productive expenditure bias of urban investment bonds bias is more serious;city and county governments prefer financial incentives,the productive expenditure bias of urban investment bonds tends to be light.Thirdly,After 2008,the local governments did respond to the central government’s policy to improve people’s livelihood and significantly weakened the productive expenditure bias of urban investment bonds.Lastly,in the control of the macroeconomic variables,the productive expenditure bias of urban investment bonds has a significant positive effect on economic growth,while the impact on the improvement of the people’s livelihood is not significant.Both theoretical and empirical analysis of this paper shows that the root of the productive expenditure bias of urban investment bonds is political rank-order system with GDP and revenue as key indicators.Such bias distorts the central government’s intention to improve the livelihood of people and impedes the transformation to public service-oriented government in China.An appropriate solution to this problem is to adjust the incentive policies according to the level difference of local governments’ preference,that is,the provincial government prefer political incentives,and we should reform the existing performance evaluation mechanism,strengthening its management and service functions;while the city and county governments prefer financial incentives,we should increase the fiscal revenue,especially overcome County-township fiscal dilemma.We should also improve the local people’s Congress,the judicial system and gradually enhance governmental incentives to satisfy the demands of local residents. |
