Fiscal Pressure,Local Government Intervention and Allocation of Credit Resources

This paper discusses the local governments' fiscal burden from three aspects—the fiscal system,the fiscal payments balance of central and local governments and the tax system reform in 1994.Then the author discusses the way of local governments to ease the fiscal pressure by controlling the financial resources.Moreover,the decentralization system gives local governments a chance to expand the distortion.Local governments intervene on the financial system for credit resources,which hampers the efficiency of financial resources.Finally,by using inter-provincial panel data from 1985 to 2005,this paper gives empirical analysis to support the views above.