Fiscal Vertical Imbalance With Local Fiscal Expenditure Cycle Imbalance
Cross-cycle and counter-cycle regulation is an important part of scientific fiscal policies, and the 14th Five-Year Plan and the central economic work conferences in the past three years have clearly proposed to strengthen cross-cycle and counter-cycle regulation. From the macroeconomic perspective, fiscal policies exhibit the feature of cyclical balance and the function of counter-cyclical adjustment from their initial design, but recent studies show that this is not always the case, with many countries' fiscal expenditures remaining in a pro-cyclical state for a long time. ProPro-cyclical-cyclical fiscal policies imply social welfare losses, because fiscal expenditures under a pro-cyclical fiscal policy are not navigating economic fluctuations, but increasing output fluctuations. Pro-cyclical fiscal expenditures mean that macro policies are not conducive to helping individuals without independent risk management abilities get rid of personal risk, and hinder consumers from optimizing their own consumption over time.Based on the institutional analysis and fact comb, this paper uses the data from 1980 to 2019 and simultaneous equations to explore the impact of fiscal vertical imbalance on local fiscal expenditure cycle imbalance and the transmission mechanism of fiscal revenue cycle between the two. The empirical results are as follows. Firstly, the VFI of the fiscal system tends to aggravate the cyclical imbalance of local fiscal expenditures. The fiscal revenue cycle is an important channel of the VFI of the fiscal system influencing the cyclical imbalance of fiscal expenditures, but the impacts of VFI on the local fiscal revenue cycle and local fiscal expenditure cycle are in opposite directions. Secondly, after the 1994 Tax Sharing Reform, the cyclical imbalance of fiscal expenditures persists, and the direct and indirect effects of the VFI of the fiscal system on the cyclical imbalance of fiscal expenditures have not changed, but the total effect has shifted from a positive promotion effect to a negative inhibition effect. The framework and conclusions of this paper provide new perspectives to fully understand the economic impact of the fiscal system on local government finance. It is an important goal of the Chinese government to change the cyclical imbalance of fiscal expenditures and promote counter cyclical fiscal regulation. By appropriately reducing the decentralization of expenditures and increasing the decentralization of revenue, we will change the trend of increasing VFI in the fiscal system. We can reform the traditional annual budget balance mechanism with a cross-year budget balance, reduce the pro-cyclical transmission of fiscal revenue fluctuations to fiscal expenditure fluctuations, and reduce large-scale fiscal stimulus as the"4-Trillion-Yuan" stimulus package. The opening of the debt market for local governments to optimize cyclical adjustments of fiscal resources can play a crucial role in reducing the extent of cyclical imbalance in local fiscal expenditures.
万方数据
维普
