About this paper

In this paper, we study the equalization effect of transfer payment on financial resources by using the county level data from 2009 to 2013. Analysis results show that the current transfer payment system has played a role in the equalization of financial resources at the county level. Due to transfer payments, the degree of inequality of the per capita of the general budget expenditure is lower than that of per capita GDP and per capita general budget revenue. But the degree of inequality of the per capita general budget revenue is higher than that of per capita GDP. This shows that the current financial revenue mechanism has enlarged the income imbalance between counties. The imbalance of financial resources between counties not only exists within the province, but also exists between different provinces and regions. Therefore to regulate the county financial resources needs central and local coordination. But the main responsibility of ensuring the basic financial resources of the county government so as to realize the equalization of basic public services in the county lies in the provincial government.

Reference

Ma Haitao, Ren Zhiwei. The Equalization Effect of Transfer Payment on Counties’ Financial Resources[J]. Financial Research, 2017(05): 4-14.