Fiscal Transparency,budget And Final Account Deviation And Local Government Debt Scale

Local government debt is an important issue in the management of the national economy.For a long time,the scale of local government debt has gradually expanded due to opaque information and irregular management of government debt.According to the National Ministry of Finance,the national balance of local government debt was RMB 10.89 trillion in 2013,increasing to RMB 35.06 trillion by 2022.In order to control the excessive increase in the scale of local government debt and to deal with debt risks,China has taken many measures,among which strengthening the openness and transparency of government financial information is one of the important tools.The increased transparency can improve the public’s understanding of the government’s financial situation and better monitor the government’s debt management.The implementation of the new Budget Law in 2015 provided legal safeguards for the transparent and standardised management of local government debt.the Regulation on the Disclosure of Government Information,which was amended in2019,also requires that the government should disclose debt information in a timely,comprehensive,truthful and accurate manner to facilitate public supervision.In addition,China is also continuously improving its budget management and regulating the income and expenditure behaviour of local governments by strengthening budgetary constraints and reducing deviations in government financial budgets.This paper takes the prevention and control of local government debt as the starting and ending point,explores the influence of fiscal transparency on the scale of local government debt and its mechanism of action,and proposes relevant countermeasures.Firstly,based on a review of domestic and international literature on the relationship between fiscal transparency,budget deviation and local government debt,the theoretical mechanism of fiscal transparency and budget deviation affecting local government debt is explored based on information asymmetry,public finance and other related theories.Secondly,an in-depth study was conducted on government debt,fiscal transparency and changes in the budget and accounts in Southwest China.It was found that the scale of government debt in Southwest China is large and there are differences in the scale of debt among local governments;fiscal transparency in Southwest China is improving year by year,but the degree of improvement is not obvious;the degree of deviation from the budget and accounts revenue is low and the degree of deviation from the budget and accounts expenditure is high in Southwest China,and the deviation from the budget and accounts is gradually improved with the continuous improvement of regulations.Third,using data from 2013-2021 for each prefecture-level city in Southwest China,a panel regression model was developed to empirically test the effects of fiscal transparency and budget deviations on the scale of local government debt,and the following conclusions were drawn: increasing fiscal transparency reduces the scale of local government debt,deviating from budget expenditures expands the scale of local government debt,and fiscal transparency suppresses the scale of local government debt by reducing deviations from budget expenditures,and there is heterogeneity in this mechanism of action,which is more pronounced in places with high levels of economic development,high levels of financial market development and high fiscal deficits.Fourth,in order to control the excessive expansion of local government debt,the following countermeasures are proposed from the perspective of fiscal management: establish a sound local government debt management and supervision system and improve the local government debt information platform;improve fiscal transparency indicators and actively promote the disclosure of fiscal information;increase the construction of budget management and enhance the scientific and legal nature of the budget;increase the disclosure and refinement of fiscal information and expand the disclosure methods;improve the social supervision system and enhance social participation;and strengthen the supervision of the financial market and improve the financial market information disclosure mechanism.