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 Wysłany: Pią 12:10, 29 Kwi 2011 Temat postu: The type of fiscal transfer payment of compulsory |
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Type of compulsory transfer payments combined with different policy objectives
Abstract: compulsory education by the local charge, based on equity and efficiency considerations, which calls for higher levels of government to provide compulsory education for the local government financial assistance. Because different types of grants have different economic effects of policies to achieve the desired goal, the government financial assistance in the implementation of compulsory education, you must select the appropriate type with matching grants. Keywords: compulsory education; transfer payments; type; policy objectives 1985 fiscal year basic education reform and the establishment of decentralized local responsibility, the principle of graded school, and then gradually in accordance with this principle formation of the to achieve the objective to play a decisive role. However, as a transitional institutional arrangements, in the course of its operation also revealed a number of shortcomings, the most prominent problem is that regional differences in investment in compulsory education. Recently a number of studies have shown that: Since the early 90s, China's regional differences in compulsory education into the rise year by year. In the long run, still in compulsory education, while the local charge, the only way to solve this problem is to establish a standard financial transfer payment system of compulsory education. How to create, first of all we need to theoretically understand the following questions: Why the need for decentralized delivery of compulsory education, higher levels of government to provide financial assistance? Compulsory Education What are the basic types of transfer payments? Different types of transfer payments to local government decision-making compulsory education spending will generate the kind of impact? Different policy objectives should be to choose which type of transfer payment? This article attempts to answer these questions in theory,[link widoczny dla zalogowanych], in order to establish our standard financial transfer payment system of compulsory education to provide theoretical support. one compulsory theoretical basis for the financial transfer payment compulsory education by the local government, the reason for higher levels of government to provide financial assistance is based mainly on the following several reasons: the first First, local governments provide compulsory education will have positive Olsen (Olson) pointed out that income distribution does not consider the case of federal government funds transferred to the state where the only reasonable grounds that the benefits provision of public goods beyond the scope of the administrative boundaries of its jurisdiction. In this area as well-educated primary and secondary students, the future may in other area of employment. As for local governments to provide compulsory education externalities require higher levels of government to provide financial assistance of economics is very simple: first, in the absence of higher levels of government financial assistance under the circumstances, the interests of the local government may result in maximizing the supply of compulsory education there is lack of efficiency loss. Second, for most countries, especially as we have a very uneven level of economic development, large developing countries, compulsory education funded solely by local financial income, due to the different parts of the financial capacity and the cost of compulsory education spending differences will inevitably result in the compulsory education between the local service level of non-equal. The compulsory education is a basis for local economic development, compulsory education will tend to further exacerbate the unfair social and economic inequalities between the local and then threaten social stability, and therefore need to take higher levels of government transfer payments to compensate local approach differences in fiscal capacity among the government, in order to achieve the compulsory education between the local horizontal fiscal balance. Third, fiscal federalism in the implementation of (multi-level budget subjects), taking into account the fairness and efficiency of taxation, the central government tax base broad and has a flow of taxes (such as value-added tax, consumption tax) and a redistribution effect the personal income tax was placed under the central government, this part of the income of the majority of total revenue, and to adapt to the local government and does not levy taxes with little liquidity left to local governments. This makes the local government may simply not compulsory Politics capacity to assume full financial responsibility for compulsory education in the financial vertical imbalance occurs. This situation in our country after the 1994 tax reform in some places is quite outstanding. Local government powers and financial authority for asymmetric vertical fiscal imbalance in the formation of higher-level governments also need to be responsible for compulsory education for local financial assistance, to address the structural deficit. Fourth, the individual requirements of fairness. In accordance with the egalitarian view of goods, compulsory education is a kind of all citizens are entitled to the important items that everyone should be a minimum of schooling. In real life, even though the local government to provide free compulsory education for the area citizens, but for those disadvantaged families and lack of learning ability of normal individuals, without additional financial support, I am afraid they still can not enjoy equal obligations educational opportunities. Financial transfer payments to individuals to implement this with a redistributive fiscal policy is not suitable for the implementation of decentralization of local government, it requires the central government or regional government to bear. Because the implementation by local governments because of population redistribution policies which led to the free flow of a non-efficient outcome. In addition, compulsory education is also often seen as a useful product. Local government in the provision of useful products, often beneficial result of the evaluation of the product is lower than the social and rational evaluation, leading to useful products used in local government spending on higher levels of government or society not reach the required level, need higher levels of government through appropriate channels to be corrected, and intergovernmental fiscal transfers are used in many countries, decentralization effective means to correct one of these deviations. two types of compulsory education, financial transfer payment higher levels of government transfer payments for compulsory education is usually divided into two types: one is included in the higher levels of government to local governments general transfer payments. Such as Japan's local allocation tax, the British RSG allocation to include the central government subsidies for compulsory education. The so-called general transfer payments, also known as unconditional or total one-off transfer payments, is higher levels of government transfer payments to the lower levels of government do not require the use of direction, without any conditions, funds allocated by formula, the formula is not included in the control of local government factors such as population density, geographic conditions and the per capita fiscal income. Unconditional transfer payments to local governments aimed at ensuring the financial ability to provide roughly equal with the national compulsory education, including public services, including often difficult to accurately calculate such transfers for a specific proportion of compulsory education. The other is a higher level government-designated special subsidies for compulsory education. If China's central county In general, special subsidies for compulsory education policy has a strong local government in the use of such funds must be in strict accordance with the relevant provisions of higher level shall not be used for other purposes. Special way in the distribution of grants, either by formula allocation, the allocation of items can also press. whether the funds requested under the grant with the level lower levels of government matching funds, can be further divided into special subsidies for compulsory education will be used to support grant and non-matching grants. Matching grants, also known as the symmetry of the subsidy means higher levels of government to support local activities of a particular provision of compulsory education, every dollar, the local government must complete a certain proportion, and its use of detailed and thorough instructions. Mainly by the allocation of items matching grants, subsidies depends on the size of the local government's own expenditures. Matching grant is in accordance with the scale of subsidies there is a limit cap can also be subdivided into not supporting the matching grant and subsidy cap. Also known as non-matching grant of one-off special grants. Although it is also earmarked for the obligations of effective education, but local governments how to use and which aspects of the compulsory use of no specific requirements. Such one-off grants normally allocated by formula to local governments, the size of grants expenditures and local government decision-making independent of compulsory education. three different types of economic effects of transfer payments intergovernmental grants of different types of local government expenditure decisions of compulsory education is different. 1. General transfer payments. General transfer payments is actually the central and regional governments block grants to local governments. Compulsory local government spending its influence decision-making shown in Figure 2: Local Government for the initial budget line AB, can maximize the social welfare point of indifference curve tangent point Ⅰ and AB E0, with local government its own revenues to provide the amount of compulsory service OX0. the central government and regional governments to provide general local government fiscal transfer payment to AC, because the local government to get an unconditional free resources at their disposal, the purchasing power of local government improved, the local government's initial budget constraint to move to the CD. new equilibrium point to a higher indifference curve Ⅱ and the new CD is tangent to budget constraint at point E1. can be seen from the figure, the general transfer paid by the income effect of compulsory education to local governments to provide the number of services has increased, but the increase in the number is limited. Because such transfers is no point, it can be used for any government to provide public goods, and compulsory education, but local governments in a number of public goods, according to some Western economists, the general transfer delivery also has the role of tax cuts. 2. Non-matching of compulsory education, special transfer payments. Central and regional government to local governments to provide a fixed one-time funds for compulsory education and requires local governments for compulsory education shall not reduce its own revenue. Its local government decision-making of compulsory education expenditure as shown in Figure 3: Local governments face the same initial conditions, non-matching of compulsory education to provide special subsidies for local governments more resources, resulting budget constraint outside shift. Compulsory education requirement can only be used as subsidies, the new budget constraint AZD as a line. Restrictions and conditions that the local government chooses corner Z, Z points in the local government grants AZ of all all for compulsory education. With equal amount of general transfer payments compared to the welfare of local residents down. It can be seen from Figure 3, in the form of general transfer payments, to achieve social welfare maximization point of E1 than in the higher indifference curve Ⅱ Ⅲ on the indifference curve. The figure also shows that: only when local government expenditure for compulsory education subsidy is less than the amount of time that is less than X2, and the subsidy amount is greater than under normal circumstances, the growth of local expenditures for compulsory education, the restrictions on Subsidies before work, or special non-matching grants and general financial assistance to no difference. Also can not guarantee the amount of subsidy for compulsory education rather than for all other products. 3. Does not cap the supporting compulsory education in special subsidies. Does not cap the supporting compulsory education compulsory education in special grants to local governments in decision-making of financial expenditure shown in Figure 4: Local governments face the initial budget constraint is AB, a combination of utility maximization point E0. Central and regional government to provide compulsory education for the local government matching grants a non-cap, as necessary, which reduces the supply of local government services, the marginal cost of compulsory education (equivalent to a subsidy from the price), so the budget constraint to move to AC In the new budget constraint line combinations to achieve maximum utility point into E2. at that point the local government to provide compulsory education, a substantial increase in the number of service points, the local consumption of other goods voters reduce the number of Y. For comparison, the same scale to make special allowances and the non-supporting compulsory education system of general transfer payments total budget constraint as AZF, DF, a combination of utility maximization point of Z, respectively, and E1. Is evident from the figure: Special support is not compulsory cap subsidies to local governments to increase spending on compulsory education, the increase in the total amount of the same size than the number of general transfer payments and special non-matching grant of compulsory education is much greater. This is of special subsidies because they do not cap will support local governments by two aspects, on the one hand it reduces the price of compulsory service, making the compulsory service compared to other products become more expensive, resulting in the substitution effect; on the other hand It is also a corresponding increase in local government revenue, improve the purchasing power of local governments, resulting in the income effect. For the same amount of general transfer payments and special subsidies of non-matching, the same scale of income means that they are only the same effect without the substitution effect, naturally they encourage local governments to increase spending on the role of compulsory education to be smaller . However, these non-matching grant of special and general fiscal transfer payment, because of consumer choice is not distorted by price changes, so they can enhance the welfare of local voters (utility level). 4. Cap special matching grant of compulsory education. And non-matching grants special cap compared to cap special matching grants to local fiscal expenditure of compulsory education differ in that the different changes in the budget constraint. Shown in Figure 5, assuming that local governments face budget constraint for the initial line ACD, matching grants to compulsory service in the price down to point C, the C point, the compulsory service when the price went back to the price without subsidy . Thus, the budget constraint line parallel to the original budget constraint, and emigration. If the combination of utility maximization point in C points to the left, capping the subsidy is to support grants; if the combination of points in C maximizing the effectiveness of the right point, it becomes a one-time grant of subsidies; if the point is precisely the combination of utility maximization point in C , at which point the cap on local governments use the full potential of special subsidies. It can be seen in the specific local government expenditures do not know the circumstances, it is impossible to know exactly matching cap compulsory education grant expenditure decisions of local impact, what is the supporting role played by special subsidies or one-time role. Generally speaking, the local government felt the price effect, capping the matching grant of compulsory education in the local government to increase spending than simply supporting the role of special subsidies more effective. this point, through the Economic Analysis of the above can lead to the intergovernmental fiscal transfer payment of compulsory education the following main conclusions: first, the local government's compulsory education in increasing the role of fiscal spending, the matching obligations special education is much larger than non-matching grant of compulsory education, special grants, which does not cap the role of special subsidies for compulsory education in supporting the largest; rather than supporting the special grant of compulsory education and the total amount of general transfer payments compared to the former and more effective. Second, the total amount of general transfer payments and special subsidies for non-support of compulsory education does not change the relative prices of local goods, they improve the welfare of local voters better than supporting the role of special subsidies for compulsory education major, in which the total The general transfer payments is the best mechanism. Third, in general, non-supporting compulsory education compulsory education for special grants and special subsidies cap should be used cautiously. Unless the amount of subsidy for compulsory education than the local government itself, bigger spending, or higher subsidies will be less than the expected policy goals. In particular, the special non-matching grant of compulsory education, it not only to motivate local governments to increase expenditure and improve the effectiveness of compulsory education levels is suboptimal, but can not guarantee higher levels of government financial assistance provided for the compulsory education is not used for other public goods or the role of local governments have replaced. Of course, non-support of special subsidies for personal or emergency measures are still functioning. four different compulsory education finance policy objectives and financial transfer payment type selection mentioned above, in the decentralized fiscal system of compulsory education, compulsory education externalities, compulsory education in the vertical and horizontal fiscal imbalances, the local government in achieving fairness in the absence of compulsory personal and local government and higher levels of government recognize the bias in the compulsory education is higher levels of government to provide compulsory education for the local government financial assistance of the Economic Basis. Accordingly, it is also compulsory for the government fiscal transfers between the established policy objectives: first, the compulsory education externalities; the second is to achieve vertical and horizontal fiscal balance of compulsory education, compulsory education is to meet the three requirements of individual equity; four embodying higher levels of government preferences for compulsory education. As different forms of transfer payments to local governments the impact of compulsory education in the different financial decisions, so they have a different policy effects. To achieve these goals, higher levels of government must be based on different policy objectives to select a different form of transfer payments. 1. Internalization of external effects of compulsory education. Internalize the external effects, that is, higher levels of government to adopt a form of transfer payments, inspire and guide local governments to spend money on compulsory education, so as to achieve Pareto efficiency standards required by the compulsory education spending levels. Among the many forms of compulsory transfer, certainly not in the matching grant cap is the best option. Because the choice of other non-matching grant form, to achieve the desired policy objectives, higher levels of government to pay a high price. In theory, if the matching is equal to the ratio of income share of non-residents, then the cap is not just to offset the local matching grant compulsory education between the external impact. 2. Compulsory education in the vertical and horizontal fiscal balance. According to previous analysis, the vertical fiscal imbalance of compulsory education mainly refers to the local government income over expenditure, higher levels of government need to provide compulsory education to local governments for more revenue. Apparently increasing local government revenue the best way is to use the unconditional form of general transfer payments. Compulsory financial landscape to achieve a balance should be chosen depending on what form the government on this understanding of the concept. If the horizontal fiscal balance is defined as the financial capacity of the balance, only need to select the form of unconditional transfer payments to the general; if higher levels of government is more concerned about the results of compulsory education, the horizontal balance of expenditure from the preceding analysis shows that, in selected special than the general transfer payments, subsidies and low cost (or more effective). 3. Compulsory personal equity. Disadvantaged groups or individuals without the financial ability to provide additional financial support to ensure their enjoyment of equal opportunities for compulsory education, which is actually an individual or family for income redistribution fiscal policy should be non-obvious support of the compulsory education of special subsidies. As these grants aimed at improving the equality of individual ability to pay rather than the financial capacity of local governments, according to the preceding analysis, one-off special grant if the local government agency commissioned to implement, it is difficult to ensure that the grant not used for other aspects. To prevent the subsidy benefit 4. Reflect the higher levels of government preferences for compulsory education. Reflects the preference for compulsory education compulsory education government financial transfer payment financial targets, but also is to encourage local governments to increase spending to meet the compulsory education level required by society, it is obvious targets for such policies is the best form of transfer payments to support grants. short, compulsory education by the local responsible for higher levels of government to provide compulsory education for the local government financial subsidies for many reasons, the corresponding higher levels of government also established a number of financial assistance to implement compulsory education goals. The theoretical analysis shows that: In order to achieve the desired policy objectives, the Government transfer payments to be based on different forms of economic effect, select the appropriate type of transfer payments to match with different policy objectives. In general, the vertical fiscal balance without considering the circumstances, the efficiency of matching grants are targeted to achieve the best choice for general transfer payments, are equal members of the local financial position of compulsory education appropriate mechanism, to ensure that the results of local fiscal expenditure of compulsory education Equality, non-matching grant of special transfer payments than the general effect. This form of two theoretical models: one for the special one-time compulsory education grants supporting the total combination of grants and the other is supporting compulsory education grants and special one-time special (non-matching) grants portfolio. Of course, specific to a country, whether financial transfer payment of compulsory education should choose which mode, in addition to theoretical considerations, often have to take into account the country's political and economic systems and cultural traditions.
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