A Study Of Regional Competition And Growth In The View Of Financial Power And Authority Power

Since the tax reform in 1990s,the central and provincial government took fiscal decentralization reform,obtaining an ideal economic results.Through the bidirectional decentralization in both administrative and economic area,the enthusiasm of local governments and enterprises was stimulated and promoted the rapid growth of China's economy.On the other hand,local dislocation of financial and authority power caused by decentralized competition were causing inadequate supply of public goods,market distortions,and duplication sex.Meanwhile,the"tournament" mechanism of official promotion led to its use of financial powers to pave the way for political promotion,and caused the corruption,rent-seeking and other social issues.In order to investigate the mechanism of China's financial problems,this paper argues that it can be analyzed using the classical path of fiscal decentralization theory.Specifically,as the representative of the first generation of fiscal decentralization theorists,Tiebout,Musgrave and Oates provide a better analysis perspectives for fiscal federalism by studying the supply of public goods at the level of centralization and decentralization arrangements.But because of its ignoring externalities of public goods,plus the assumption omnipotent government,which makes the policy of first-generation theory of fiscal decentralization proposal lacks reality and feasibility.Unlike the first generation of idealized hypothetical theory of fiscal decentralization,the second-generation theory of fiscal decentralization opens the "black box" of local government decision-making behavior,and introduces the incentive theory and institutional design of analytical framework.Its construction of the new theory of the firm and local government officials about the incentive system in research on proxy issues explores the tripartite inter-regional competition and provides an analytical framework for the analysis of these problems exist in China's financial system.Therefore,this paper is based on the second generation of the theoretical framework of fiscal decentralization,which portrayed by the model of local government decision-making behavior in the competition of central-local,local-local and regional-resident and gives general analysis;in the perspective of financial authority and powers,this paper studies the effects of both local government behavior and economic performance;And analyzes differences in local government decision-making competition with static capital model and flowing capital model;And introduces the tax competition variable,based on the model of Yang Qijing(2010),gets the equilibrium of each endogenous economic variables,and found the optimal path of economic development of social welfare.And this paper establishes a panel regression model of fiscal competition,property powers matching,the degree of market and economic growth,and operates empirical test between 30 provinces and municipalities from 2004 to 2013.The main conclusions are summarized as follows:(1)Mismatching of property and powers have different effects on the behavior of the local government decision-making.Receiving on property and decentralizing on powers can inhibit the effect of overinvestment in the economic public goods,but operating in the latter part of the policy implementation is better than in the initial.(2)the flowing of capital across jurisdictions prompts the local government finances making more intense competition.Accordingly,local governments also get a higher economic growth,but it is in the price of rising the social injustice and the lack of non-economic goods.(3)Finance degree of competition and the match of power and property have an impact on China's economy,which has a significant regional differences.Generally speaking,the mismatch of power and property and fiscal competition between local governments has had a negative impact on economic growth,and eastern part of China has a more negative impact than whole country and mid-west part.The promotion of marketing has a positive impact on economy,and mid-west part's effect is higher.In view of the above conclusions,the paper proposes the following policy recommendations:(1)According the mismatch of power and property in China,the basic framework of tax statutory taxation should be established,and it is necessary to clear the central and local tax division and establish scientific budget planning;(2)Establish a scientific performance evaluation system and complete the promotion system of local officials;reduce the weight of the economic assessment appropriately;And establish a more comprehensive evaluation system included the standard of living,and other indicators of environmental quality.(3)Given the characteristics of the eastern and western economic development has significant regional differences,the competition motivation in eastern part should be inhibited and strengthen the marketing power of mid-west part in order to get better policy outcomes.