Determinants of Transfers from Central to Local Governments in China─Evidence from Spatial Econometrics Analysis

• Main Authors: Li, I Chi, 李奕碁
• Other Authors: Huang, Jr Tsung
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/a9xugz

碩士 === 國立政治大學 === 財政學系 === 104 === Since 1994, a tax revenue allocation system known as the “central to local transfer payments” has been implemented by China’s Central Government. The main policy objectives of transfer payments are about the elimination of the fiscal disparities among provinces, and the provision of public spending demands to specific policy. As a fiscal policy tool, the transfer payment system endows the power for China's central government to balance the regional developments, and to achieve specific policy objectives such as environment protection, agricultural development, and political stability. However, through the mode of the allocation, are the transfer payments indeed balancing the regional developments, and providing the adequate financial resources of local expenditure? Or the allocation of transfer payments is affected by the political power of provinces and cities in the central government? Are the interests of the provinces and cities affected by the cooperation or competition of their agents in the central government? If the effects indeed exist, are they increasing benefits, or causing damage? The purpose of this study is to take research on the determinants to the transfer payments per capita, using the spatial econometrics model for the existence of spatial autocorrelation of the transfer payments. In consider of the spatial autocorrelation, the empirical study analyses the effects of the financial capacity factors, fiscal demand factors as well as the political power factor on the allocation of transfer payments, improving the theoretical basis that the past literatures built on the political power factors, and eliminating the omitted variable bias. Considering the results of Moran’s I, Hausman test and Wald tests, I decided to use the random effect Spatial-Durbin model. The results show that from 1995 to 2013, transfer payments per capita among regions are significantly positive spatial correlated to one another. In addition, the result of spatial econometric analysis shows that the transfer payments per capita are significantly and positively affected by the gross province production per capita, fiscal deficit ratio, dependency ratio, the proportion of rural population and ethnic minorities; and the political power indicators of provinces have significant negative effect on transfer payments per capita. We call the negative effect of political power the “competition resource loss effect."