Research On The Income Effect Of "One Decision For Each Project" On Financial Rewards And Subsidies

There are so many factors that can affect the rural residents’ income level.The supply level of rural public goods has attracted widespread attention of scholars,such as agricultural research,irrigation,rural education and infrastructure construction including roads,electricity,communications and so on.All these have played a positive role in promoting the rural residents’ income level.However,the village public goods,as a part of rural public goods haven’t received widespread attention.From the Rural Tax Reform to the trial of “One decision for each project” on financial rewards and subsidies,“One decision for each project” on raising money and labors,as the basic system of public goods supply in the village at that time failed to mobilize the enthusiasm of the main suppliers effectively,which resulted in a serious shortage of public goods supply in the villages.“One decision for each project” on financial rewards and subsidies is a major institutional innovation with Chinese characteristics.Can the supply system of public goods in villages,which combines financial rewards and subsidies,become an effective force for the "prosperity" in the rural vitalization strategy? This study uses the survey data of 271 administrative villages in Liaoning in 2017 and the panel data of 1869 counties in China from 2002 to 2015 to conduct an empirically analysis of the short-term and long-term effects of the “One decision for each project” on financial rewards and subsidies on the rural residents’ income level.In order to make contributions to consummating the performance evaluation system of the “One decision for each project” on financial rewards and subsidies.Proposing some corresponding policy suggestions to improve the supply system of public goods in villages and improving the rural residents’ income level.This paper is divided into seven chapters,the core parts are Chapter 3 to Chapter 6,the main research contents include:(1)Descriptive analysis shows that the rural residents’ per capita net income in Liaoning Province is 10614.5 RMB,and 74% of administrative villages have received “One decision for each project” on financial rewards and subsidies in recent three years.(2)Based on the survey data of 271 administrative villages in Liaoning,this paper examines the impact of the “One decision for each project” on financial rewards and subsidies on the rural residents’ income level and analysis its internal mechanism.Firstly,the common least squares method is used to prove the effect of “One decision for each project” on financial rewards and subsidies on the growth of rural residents’ income level.Secondly,the instrumental variable is used to solve the possible endogenous problems and can prove the existence of the income-increasing effect.Thirdly,the intermediary effect model is used to analyze the internal mechanism of the income-increasing effect.Finally,this study uses the spatial econometric model to solve the possible spatial correlation problems,and confirms the income-increasing effect.(3)Based on the survey data of 271 administrative villages in Liaoning,this paper examines the impact of the financial rewards and the numbers of construction projects on the rural residents’ income level.(4)Based on the county panel data of 1869 counties in China from 2002 to 2015,this paper tests the long-term effect of “One decision for each project” on financial rewards and subsidies on the rural residents’ income level,then tests the robustness of the results.This study finds that:(1)Combining the theory of public goods and the theory of public finance,it can be found that the effective supply of public goods in villages can improve the rural residents’ income level through the combination of financial support and villagers’ voluntary provision.(2)In the short term,“One decision for each project” on financial rewards and subsidies can improve the rural residents’ per capita net income level.In the past three years,those who have received financial rewards and subsidies is 19.1% higher than those who have not in the level of rural residents’ per capita net income.After solving the possible endogenous problems,this positive impact still exists.The empirical results show that the degree of road hardening in villages plays a mediating role.(3)The rural residents’ per capita net income level has a certain spatial correlation as it is not randomly distributed in space.The results of eliminating the spatial interaction between adjacent areas by using spatial econometric regression model show that those who have received financial rewards and subsidies is 16.6% higher than those who have not in the level of rural residents’ per capita net income.(4)Further analysis of the impact of the implementation of the one-case-one-discussion financial reward and subsidy system on the income level of rural residents shows that the per capita net income of rural residents can be increased by 5.9% for every 1% increase in the amount of financial reward and subsidy funds and 4.3% for the per capita net income of rural residents in the past three years.(5)To verify the long-term impact of the implementation of the one-case-one-discussion financial reward and subsidy system on the income of rural residents,using panel data of 1869 counties in China from 2002 to 2015,and using DID model,we verify that the implementation of the system has a significant positive impact on the per capita net income of rural residents.In general,this effect shows an increasing trend year by year,and the system effect can last for at least six years.Finally,according to the above conclusions,the corresponding policy recommendations are put forward,aiming at optimizing the financial reward and subsidy system,accelerating the increase of rural residents’ income,and providing reference for promoting the strategic development of rural revitalization.