Fiscal Decentralization and Public Goods Supply in Economic Transition:Empirical Study Based on Evidence from China

This paper states the certain relationship between fiscal decentralization and public goods supply in economic transition of china.Then it sets up a dynamic structure model to control the intrinsic relation between fiscal decentralization and public goods supply by using provincial panel data.It proves the theoretical conclusions through system GMM.The paper finds that the fiscal decentralization has positive effect on hard public goods supply and passive effect on soft public goods supply.The speed of decentralization in less-developed regions is increasing,and the districts with higher population density have higher increasing speed.The speed of decentralization in more developed regions with higher-population-density is decreasing.There exists significant positive relation between decentralization level and governmental administrative efficiency.Developing-type governments prefer hard public goods to soft ones,so they prefer high fiscal decentralization.