Fiscal Decentralization from the Angle of Multi-Provision of Public Goods:A New Analytical Framework

The scientific defining of the fiscal decentralization is decided by the reciprocal effect of the relative variables in the two dimensions: the horizontal(i.e.the functional division of public goods by government,market and non-profit organizations) and the vertical(i.e.the allocation of responsibility and power in the framework of the centre-local relationship).Because the fiscal decentralization of Chinese style would lead to the structural deviation of public goods supplied by government,the social and public demands cannot be met.While the fiscal decentralization is the key institutional arrangement of the supply of public goods,to optimize the fiscal decentralization can improve the level of the social welfare.Therefore,the reform of the fiscal decentralization is of great importance.Thus,we believe that the logic of the fiscal decentralization should be that the horizontal dimension is the first and the vertical is the second,and both the extension and the connotation of the fiscal decentralization should be expanded and deepened.Based on this,we put forward a general idea and policy option for the reform of the fiscal decentralization of Chinese style.