Fiscal Pressure Local Government Behavior And The Stagnation Of Reform

Generally speaking,fiscal pressure is the decisive factor in the reform.If a country's fiscal revenue cannot meet the need for basic public services,it is the start of reform.But observing the course of economic development in recent years,we found that the continuous rise of government debt has not obviously promoted the reform process in China.Firstly,this paper studies the internal logic of fiscal pressure affecting reform.Then,based on the national conditions of China,the thesis makes a preliminary study on the topic under the framework of the game between the central government and local governments.That is to say,based on opportunistic behavior of local government,the reasons for the coexistence of fiscal pressure and the stagnation of reform are analyzed.Based on the combination of theoretical hypothesis and empirical test,we have tested the hypothesis by using the provincial panel data between 2000 and 2014.In order to guarantee the accuracy of estimation results,this paper mainly uses the fixed effects model and System GMM estimation method to estimate the parameters.The results show that:(1)There is a significant positive relationship between fiscal pressure and market-oriented reform.In the fixed effect model,the degree of marketization will increase by 0.078 percentage points per unit of financial pressure.In system GMM estimation method,the degree of marketization will increase by 0.0215 percentage points per unit of financial pressure.(2)The official's pursuit of direct economic interests has hindered the promotion of market-oriented reform.(3)By constructing the cross between fiscal pressure and official corruption index,we found that officials' pursuit of direct economic interests weakens the role of fiscal pressure in promoting market-oriented reform.If the local government can get direct economic benefits from the system of current conditions,it will tend to ignore the risk of fiscal expansion pressure.And then it weakened the role between market reform and financial pressure.Most of the existing literature studies the impact of fiscal pressure on the reform from a theoretical point of view.This paper enriches the existing literature by using empirical tests.The existing literature on research reform emphasizes the importance of the top-level design of the central government,lacks the beneficial experience of local governments.In order to make up for the shortcomings of the existing literature,underthe framework of the game between the central government and the local government,this paper analyzes the coexistence of the increase of fiscal pressure and the stagnation of reform,and puts forward a feasible explanation,at the same time,carries on the empirical test.The conclusion of this paper shows that only when the close cooperation between the central government and the local government is carried out,can the market-oriented reform be carried forward steadily.