The Effects Of "Direct Provincial Supervision County" Financial Reform On County Economic Growth

After the reform of the tax distribution system in 1994,the central government hastaken the control of the fiscal regulation,while the provincial governments assumed more obligations.The tax distribution system works well within a certain period of time,but with the continuous development of the economy,the contradiction of the fiscal power and expenditure obligation between the central government and the provincial government has become increasingly prominent.This contradiction is passed down layer by layer with the help of the contracted financial system of our country between the governments those under the provincial level,when the contradiction is transferred between the city government and the county government,It is manifested as a phenomenon we called "city scraping county,city pressure county".In the long run,at the bottom of the government level,the county government is not able to reach the budget and cannot afford to develop the county economy.To develop the county economy,we need to improve the existing financial system.In Zhejiang Province,the"direct provincial management county" financial system was implemented very early and scored impressive results.The success of Zhejiang promoted the attempt of fiscal system reform of" direct provincial management county " to be carried out nationwide.It started from Anhui,Hubei and other central regions and gradually expanded to the eastern and western regions,so far,our country already has more than 24 provinces,more or less,or fast or slow started the reform named "direct provincial management county".This paper tries to study whether the fiscal "direct provincial management county"can promote economic growth.First of all,by referring to relevant domestic literature,we have learned the reasons why scholars agree or disagree with the financial reform of "direct provincial management county" and the impact of this reform on economic growth.And through the study of foreign related theories,we make it clearly how fiscal decentralization impact the economic growth.Then,based on previous studies and current policies,this paper discusses the motivations for the reform of fiscal "direct provincial management county" in China.In addition,the present reform status of six provinces in east China is analyzed and introduced,and we also points out the existing problems of the fiscal reform "direct provincial management county".In the last part of the article,This paper uses the statistical data of six provinces in East China and combines the dual-difference regression model to analyze whether the"direct provincial supervision county" fiscal reform will contribute to county econopmic growth.Based on the differences of samples,this paper conducted three regression results with different samples,and found that the fiscal reform of "direct provincial management county" was helpful for county economic growth.The multi-sample regression makes this article more reliable on the conclusion that "direct provincial management county" can promote county economic growth.In addition,this article also conducted a variety of tests on the previous regression results,including outlier test,pre-reform trend test,and inter-group difference test.The test results show that the regression results of this paper are robust and our conclusion is persuasive.Although this paper argues that the fiscal reform of "direct provincial management county" is conducive to the promotion of county economic growth,However,according to the previous analysis,there are still some problems in the reform of the fiscal "direct provincial management county",At the end of this paper,this paper puts forward some corresponding policy Suggestions on these issues,so as to hope that the reform road will be smoother and promote economic growth.