An Empirical Study On The Impact Of Chinese Fiscal Expenditure On Economic Development

Since the reform and opening-up,the Chinese government has gradually changed from the economic manager to the service provider.After the implementation of the tax sharing system in 1994,the proportion of local government expenditure in the total fiscal expenditure increased year by year,and the local government's ability to regulate and control the regional economy increased continuously.At present,more and more attention has been paid to the structure of fiscal expenditure and expenditure autonomy of the local government in China.It is a task for the governments of the world to optimize the structure of fiscal expenditure and guide the industrial structure correctly.This paper establishes a theoretical model and an empirical model of the expenditure structure and economic growth of the local government under the existing expenditure autonomy.From the perspective of the eastern,middle and western regions of China,this paper verifies the role of fiscal expenditure structure in China in the short,medium and long term economic growth in the three regions.The theoretical analysis shows that there is an optimal proportion,which is related to the elasticity of output,of local fiscal expenditure after the reform of tax sharing system.The autonomy of local fiscal expenditure also has an optimal proportion.When the local fiscal expenditure and the central fiscal expenditure can complement each other in a certain range,it will promote economic growth.Appropriately reduce the proportion of social security expenditure in eastern and central regions to increase the proportion of social security expenditure in the western region.Reduce the proportion of agricultural expenditure in the eastern and central regions,a reasonable increase in the proportion of agricultural expenditure in the central regionThrough the empirical analysis of 30 provinces and cities in China from 2000 to2015,we find that an increase in the amount and proportion of China's science-education-culture-health spending has a negative relationship with economic growth both in a short and a mid term.It takes a long time to convert into capital,and its relative elasticity of output is lower than others.In addition,the increase of the proportion of science-education-culture-health spending will squeeze out other expenditures.Increasing the amount or proportion of general public services spending in eastern regions has positive effects on economic growth in the period of short and mid term.However,its effects gradually weaken over time,the amount of general public increasing will improve the economic in short term,while there is no significant relationship between them in mid term.Appropriately reducing the social security expenditure in the eastern and middle regions of China has positive effects on the regional economic growth in the mid term.In the eastern and western regions,reducing the amount and proportion of agricultural expenditure can increase the regional economic growth.In contrast,in the middle region,increasing the amount of agricultural expenditure reasonably with a control of its proportion can increase the middle region's economic growth.To promote the economic growth,we should reduce the retention rates in eastern and central regions of local governments or increase the transfer payments to the central government.