Finance is the pillar of national governance,and the relationship between fiscal centralization and decentralization is one of the core issues in the economic governance of major countries.This article pro-poses an analytical framework from the perspective of balance,stating that the key to the fiscal relationship of major countries lies in the balance of fiscal power between the central and local governments.Conflicts of in-terest will lead to imbalance in the existing fiscal system,and adjusting the interests of both parties will accom-pany the evolution of the fiscal system.Under this framework,it is found that with the development of the so-cialist market economy system and the rule of law system,the relationship between fiscal centralization and de-centralization in China since 1949 has mainly gone through explorations from unified state control over income and expenditure to central-local power balance,from decentralization of power and transfer of benefits to im-balance of local autonomy,and from tax distribution reform to institutional balance.Overall,the relationship evolved towards the balance of interests of governments at all levels and regions,as well as corresponding insti-tutionalization.Therefore,it is necessary to build a balanced long-term mechanism through institutionalization and rule of law.The basic goal is to improve the mechanism that fully leverages the enthusiasm of the central and local governments around key issues in the fiscal governance of major countries.That is,a long-term mechanism that balances the interests of the central and local governments should be built in the process of de-veloping towards balance.The basic task is to establish the fiscal relationship between central and local gov-ernments with clear responsibilities,coordinated financial resources,and regional balance.That is,the task of balancing responsibilities,financial resources,and regional development should be fulfilled.The basic require-ment is to establish a stable system that is compatible with the powers,payment responsibilities,and financial resources of governments at all levels.That is,according to the principles of the modern financial system in co-ordinating the powers,responsibilities,and financial resources,an effective financial and tax system should be built.
Economic Governance of a Major CountryFiscal SystemCentralization and DecentralizationBalance of Fiscal Power
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