A Study On Management And Control Of Local Governments' Debt Risk In China

After the reform of the tax distribution system in 1994,the uneven distribution of financial power and authority led to a gap in the local government's own financial resources.In order to make up for the shortage of financial funds,local governments borrow through various financing channels,such as bank loans,with the help of financing platform companies and other subjects.Local government debt has long been in a state of unregulated supervision,resulting in the unconstrained growth of local government debt,and the emergence of borrowers and repayment obligations.The main body is unclear and so on.Even some local governments have defaulted on their debts because of excessive financing and inadequate solvency.If not solved,it will lead to the deterioration of the local government's financial situation,the amplification of economic development uncertainty and the increase of social instability.This paper focuses on the local government debt risk and its causes of risk management and control policies in practice.The problem.This paper starts with the risk and causes of local government debt in China,and summarizes the general conclusions of the risk performance and risk causes of local government debt by consulting the previous research results.Then,by sorting out and summarizing the relevant policy documents of the central government for the local government debt,this paper elaborates what management measures the central government has taken to deal with the risks and their causes,and what are the solutions.In order to verify the implementation of relevant policy initiatives and policy effectiveness,the author takes Lishui City as a case study.Through field interviews and data collection,it is found that under the current situation of local government debt risk management and control in China,there are still opaque debt information,rapid growth of implicit debt,and lack of autonomous debt of local governments.Problems such as ability and source of debt capital are concentrated.Based on Smith Policy-Implementation-Processing model,this study uses case analysis,in-depth interview,descriptive statistical analysis and other methods,and combines fiscal decentralization,principal-agent theory and path dependence theory,from the aspects of policy system,policy execution agencies and target groups,and the external environment of policy execution.Analysis and discussion.This study points out that when the local government debt risk control policy has unclear direction and inadequate content precision,local governments and banks,as policy implementers and target groups,on the one hand,will adopt the strategy of distorting policy implementation because of the deviation between their own utility objectives and policy implementation objectives.On the other hand,the policy of alienation is implemented because of its lack of the ability and necessary conditions to implement policies.Finally,this study proposes a series of improvement schemes from two perspectives of optimizing the management mechanism and improving the execution ability.