Fiscal Autonomy and the Intertemporal Allocation Of Local Fiscal Resources
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| Title | Fiscal Autonomy and the Intertemporal Allocation Of Local Fiscal Resources
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| Author | Fu Minjie |
| Organization | National Academy of Economic Strategy，Chinese Academy of Social Sciences |
| Email | fmj80@foxmail.com |
| Key Words | Local Government; Fiscal Autonomy; Intertemporal Allocation of Local Fiscal Resources |
| Abstract | The efficiency of decentralization in the allocation of public resources can be seen form that higher level of financial autonomy of local government will effectively alleviate local pro-cyclical fiscal spending under annual budget balance. The alleviation comes from the fact that local financial resources are more freely used by the local government under the current intergovernmental transfer system which contains too much policy purpose from the central government instead of the local people. Under the background of annual fiscal balance requested by the budget law, the decline of financial autonomy of local government since the reform and opening up potentially worsening the intertemporal allocation efficiency of local fiscal resources.
This deterioration is not only though the reform of reducing the degree of local fiscal autonomy, but also generates additional short-term deterioration effects. Since the substantial changes in the central- local fiscal landscape of the 1994 tax-sharing reform, raise the fiscal autonomy of the local government makes it more effective to improve local pro-cyclical fiscal spending. Changes in the level of development though the size of government, foreign economic relations and the increase of per capita GDP, had no significant effect on intertemporal allocation of local financial resources , indicating that the pro-cyclical fiscal spending of local government was no the natural course of economic development.
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| Serial Number | WP1092 |
| Time | 2016-08-10 |
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