| As an important means of government financing,raising debt is able to provide local government with working capital in addition to public finance income.Especially when local government spending tends to be larger and fiscal revenue can not make up for the current fiscal expenditure,moderate size of the debt can ensure the implementation of the government’s policies to support the steady development of local economy.But the non-standard government debt financing model will also bring a series of problems,Including the blind expansion of the amount of debt,inefficient use of debt funds,inadequate debt management system,which have a negative impact on local finance,government credit and regional economic development.Therefore,it is of great significance to build a feasible debt risk assessment system and strengthen the awareness of debt risk prevention with regard to the development process and present situation of local government debt in china.Based on the theory of public goods,the theory of fiscal decentralization and the theory of intergenerational equity,scholars at home and abroad have made a deep study on the causes,effects and risks of local government debt.By using the available research results,this paper reviews the history and current situation of local government debt,summarizes its main risk performance.And then,this paper takes Fujian Province as an example to explain the specific local government debt problems.On the one hand,it analyzes the status of local government solvency and debt situation of Fujian Province,and constructs the index system to evaluate the debt risk.On the other hand,using the KMV model(KMV Credit Monitor Model)to calculate the default probability of the local government debt in Fujian Province,so as to analyze the debt sustainability,the paper puts forward some suggestions on risk prevention and the control of debt scale.The results obtained show that when the size of the debt in Fujian accounted for less than 80%of revenue that can be used to guarantee debt,there is almost no risk of default.When the ratio is 85～95%,the default risk also can be controlled.Both the index analysis and empirical results show that the local fiscal situation in Fujian is relatively stable and the solvency is assured.In order to prevent local government debt risk,it is necessary to control the scale of debt in the amount of revenue that can be used to provide guarantees.For the above findings,this paper puts forward a series of suggestions on the prevention of local government debt risk,including establishing the local government investment and financing system,constantly improving the issue mechanism of local government bonds,rationally controlling the scale of debt and improving credit rating and information disclosure system,etc. |
