The Research On Internal Drive And Risk Of Chinese Local Government Borrowing

Local government is an important force to promote China's economic development and social progress,local governments have made important contributions to the development of the region through investment to promote regional economic development and safeguard people's livelihood.However,due to the current lack of fiscal decentralization,local governments do not have sufficient financial power to match their powers,often through the use of debt to raise the required funds.Local government officials tend to expand their investment in order to develop their own,in order to gain recognition from the central government and the local people,and then gain their own promotion,which further increases the willingness to borrow.The two institutional reasons for fiscal decentralization and local government competition are the two internal drivers of local government borrowing.In 2011 and 2013,the National Audit Office conducted two audits of China's local government debt.From the published debt information,it can be known that the speed of local government debt expansion is not unpleasant,and the resulting debt risk causes political and academic circles.highly anticipated.In recent years,relevant departments have attached great importance to preventing maj or risks,and local government debt risks are an important part of this.Previous studies on the reasons for local government borrowing have been analyzed theoretically.There are few quantitative analysis and less qualitative analysis.The internal driving factors for local government borrowing are also deeply analyzed in terms of system;more analysis on the evaluation of local government debt risk.The default risk of borrowing does not provide a comprehensive and systematic analysis of debt risk.To this end,based on the relevant literature,the paper makes efforts mainly on the internal driving factors of local government borrowing and comprehensive system evaluation of local government debt risk,analyzes the internal driving factors of local government borrowing and verifies it with China's debt and related data.And build an indicator system to analyze the debt risk caused by debt expansion in various regions.Finally,according to the analysis,the corresponding measures to control China's debt problems and prevent debt risks are proposedArticle mainly studies the following;First,in-depth study and summary of the literature on the causes,risks and governance of local government debt at home and abroad,find the entry point and research methods of their own researchSecond,analyze the internal drivers of local government debt expansion.Using public goods theory,fiscal decentralization theory,and principal-agent theory system to analyze the institutional reasons for local government borrowing.Under the background of incomplete fiscal decentralization,the expansion of investment by local governrments is an important factor leading to the expansion of local debt.Third,using the econometric method,using the provincial-level local government panel data of 28 provinces in the past six years,to verify the internal driving factors of the previous part of the local government.The normative empirical method illustrates the impact of fiscal decentralization,local government competition and other factors on the scale of local government debt.The results show that fiscal decentralization and local government competition will have a significant positive impact on the size of the debtFourth,using statistical methods to systematically analyze the local government debt risk.First.the indicators such as debt ratio and debt ratio are selected to measure the local government debt risk in China using traditional methods.Then the paper establishes the local government debt risk evaluation index system,and selects 13 indicators in the two dimensions of economic risk and default risk to analyze the debt risk of 31 provinces and cities in the east and central and western regions of China.Fifth,based on the above-mentioned local government borrowing internal driving factors and debt risk analysis,propose policy recommendations to regulate local government debt.The main suggestions are:improving the financial system reform.improving the assessment and management mechanism of local officials,improving the local government debt information disclosure and management system.