| Summary: | 碩士 === 國立臺北大學 === 財政學系 === 94 === Taiwan have faced the fiscal distress since 1990s. Financial difficulties have become a issue of considerable concern for local governments in Taiwan.
This paper investigates the structural determinants of fiscal distress in 23 Taiwan counties and municipalities from 1993 to 2003. Potential determinants of fiscal distress are derived from Wolff’s common pool resource model (2004). This model shows that municipal expenditure is determined by demand factors like income per capita, poverty, birth rates, percentage of seniors etc.
Furthermore, this paper tests this model using a Panel Data analysis to explain the causes of municipal expenditure and debt. It concludes that structural determinants of municipal expenditure and debt are caused by tax revenue, intergovernmental grant, income per capita, percentage of seniors, public employment, minority and poverty.
Especially, the intergovernmental grant causes common pool resource problem seriously. Because the cost of each municipal good is spread to all tax-payers, while the benefit accrues to few counties only. Thus all the Taiwan counties and municipalities will demand more of the local public goods, leading to higher spending and increasing the accumulation of debt.
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