2006年-世界发展银行全球_The_Reform_of_the_Intergovernmental_Transfer_System_to_Achieve_a_Harmonious_Society_and_a_Level_Playing_Field_for_Regional_Development_in_China_35页_402kb

Summary of "The Reform of the Intergovernmental Transfer System to Achieve a Harmonious Society and a Level Playing Field for Regional Development in China"

Core Content

This paper explores the structure and implications of the intergovernmental transfer system in China, with a focus on its role in promoting a harmonious society and balanced regional development. It provides an analysis of the design, allocation, and economic impact of fiscal transfers between the central government and provincial, as well as provincial and local governments.

Main Points

1. Structure of Fiscal Transfers

• Central-Provincial Transfers are the primary source of revenue for subnational governments, accounting for 63.8% of total central transfers in 2004.
• These transfers include:
  • General Purpose Transfers: Revenue-sharing transfers, tax rebates, and equalization transfers.
  • Specific Purpose Transfers: Wages grants, rural tax reform grants, minority region grants, prio-1994 subsidies, and ad hoc transfers.
• Equalization Transfer (rebranded as "general-purpose grant" in 2002) aims to reduce regional disparities by distributing funds based on the fiscal gap between provinces and the national average.
• Revenue Sharing Transfers account for the largest portion, with 469.5 billion yuan in 2004, followed by tax rebates and ad hoc transfers.

2. Provincial-Local Fiscal Transfers

• All central transfers pass through provincial governments.
• There are two models:
  • Prefecture Managing County: Still in use in 20 provinces.
  • Province Managing County: Implemented in 11 provinces and 5 cities by 2005.
• County governments typically provide transfers to township governments.
• Some poor regions have adopted the "county replacing township" model to streamline governance.

3. Economic Impact of Transfers

• Equalization Transfer has a mild equalizing effect, reducing the Gini coefficient from 0.365 to 0.351, but its impact is limited due to its small size (only 3 yuan per capita in 2004).
• Specific Purpose Transfers (including ad hoc grants) have a stronger equalizing effect, reducing the Gini coefficient from 0.365 to 0.283.
• Ad hoc transfers (earmarked grants) are more significant in terms of redistribution, with a per capita value of about 1,153 yuan in 2004.
• These transfers are not transparent, predictable, or objective, which raises concerns about their effectiveness and fairness.

4. Design Considerations

• Fiscal transfers should align revenue capabilities with expenditure needs to enhance accountability and efficiency.
• The current system has inefficiencies, including:
  • A lack of transparency and objectivity in ad hoc transfers.
  • Over-reliance on ad hoc grants, which are not systematically designed.
  • A complex and fragmented structure that hinders clear policy implementation.
• The paper suggests that a reform agenda should focus on:
  • Improving equity and efficiency.
  • Ensuring predictability and sustainability of transfers.
  • Reducing administrative complexity.

Key Information

• Total Central-Provincial Transfers (2004): 1,487.2 billion yuan.
• Total Provincial-Local Transfers (2004): 1,160.8 billion yuan.
• Equalization Transfer (2004): 74.5 billion yuan (5% of total central transfers).
• Ad Hoc Transfers (2004): 322.3 billion yuan (21.7% of total central transfers).
• Tax Rebate (2004): 405 billion yuan (27.2% of total central transfers).
• Revenue Sharing Transfers (2004): 469.5 billion yuan (31.6% of total central transfers).
• Wage Grants (2004): 91.94 billion yuan.
• Rural Tax Reform Grants (2004): 52.33 billion yuan.
• Minority Region Grants (2004): 7.69 billion yuan.
• Prio-1994 Subsidies (2004): 12.6 billion yuan.
• Equalization Transfer Impact:
  • Gini coefficient for provincial revenues: 0.365 (before transfers), 0.351 (after equalization transfer), 0.283 (after ad hoc and specific purpose transfers).
• Regional Disparities:
  • Shanghai received the highest per capita central transfers (5,079 yuan).
  • Henan received the lowest (646 yuan).
  • Tibet had the highest per capita equalization transfer (705 yuan).

Conclusion

The current fiscal transfer system in China is fragmented, inefficient, and lacks transparency. While it aims to promote equity and balanced regional development, its equalizing impact is limited. Reform is necessary to ensure sustainable and equitable distribution of resources, improve local governance, and enhance accountability. The paper highlights the need for a more systematic and transparent approach to fiscal transfers, emphasizing the importance of targeted and predictable funding mechanisms.