Effective Government and Coordinated Regional Development:A Local Fiscal Expenditure Perspective
Common prosperity is an essential requirement for socialism and a notable feature of the Chinese modernization.Common prosperity not only aims to achieve overall economic well-being,but also seeks to promote balanced development between urban and rural areas,and between different regions.The coordinated regional development,which is crucial for China's economic growth,is unattainable without effective coordination among regional governments.An"effective government"may efficiently utilize the economic guiding,monitoring,and early warning functions of a regional government based on market rules and market mechanisms.It utilizes strategies such as planning and investment to effectively organize local economic development resources,thus promoting the comprehensive,scientific,and sustainable growth of the entire country.Therefore,the examination of the effective governments in coordinated regional development has important practical and theoretical significance.This article examines the role of local governments in coordinated regional development and its optimizationfrom the perspective of local fiscal expenditures.First,a spatial general equilibrium model incorporating government sectors is developed in accordance with Tombe and Zhu(2019)and Fajgelbaum et al.(2019),in order to illustrate the mechanism by which local fiscal expenditures influence regional economic inequality.Next,the model parameters and variables are adjusted using provincial data in 2015 as a reference point.Subsequently,an evaluation is conducted to determine the effect of changes in local fiscal expenditures from 2000 to 2015 on regional economic inequality,and its mechanism of action on a regional,provincial,and national scale.Lastly,the optimization of the scale and the composition of local fiscal expenditures in the context of coordinated regional development are investigated using counterfactual simulation.The results show that:(1)The fluctuations in local fiscal expenditures from 2000 to 2015,as analyzed through the spatial general equilibrium,contributed to the reduction of the regional economic gap.However,when trade costs and population mobility are not considered,it is argued that the regional economic gap can be widened.(2)The marginaleffect of the composition of fiscal expenditure on regional economic inequality is greater than that of the scale of fiscal expenditure.By decreasing trade and mobility costs,the effectiveness of fiscal expenditures can be improved.(3)The optimization of fiscal expenditure structure,when compared with expenditure scale,not only facilitates coordinated regional development but also enhances total economic output.The study highlights several policy implications.Firstly,it emphasizes the need to evaluate the impact of local fiscal expenditures using a general equilibrium approach.Secondly,it points out the crucial role of local fiscal expenditures in promotingcoordinatedregional development and achieving common prosperity.Lastly,it suggests that optimizing local fiscal expenditures can enhance labor allocation efficiency,facilitate smooth commodity trade,and contribute to the establishment of a unified national market.This article extends existing research by focusing on the following aspects.(1)It examines how local government's role as an effective government can actively contribute to the coordinated regional development through fiscal expenditures.(2)It analyzes and compares the effects of local fiscal expenditures within the frameworks of partial equilibrium and general equilibrium,which highlights the importance of using a spatial general equilibrium model to evaluate local fiscal policies.(3)It discusses the optimization of the size and composition of local fiscal expenditures to achieve coordinated regional development,and finds that optimizing the fiscal expenditure structure can reduce regional economic inequality while promoting economic growth,thus reaching the balance of both fairness and efficiency.
coordinated regional developmentlocal fiscal expenditurespatial general equilibrium
万方数据
维普
