Fiscal Decentralization,Institutional Arrangements and Public Service Supply:An Empirical Analysis Based on China's Provincial Data

This paper tests the relationship between fiscal decentralization and local government public service provision.The results show that the relationship between income and expenditure decentralization and local public service supply is inverted U-shape and are U-shape respectively,that better environment of local officials promotion does not necessarily bring better supply of local public services thus forming paradox between the local governance capacity and public service provision.The strategic policy of tax system reform and regional equalization of basic public services both have significant impact on local public services.Population density,local economic development and government size are all significant statistically,but market level is not significant.Compared with east region,public services supply in central,west and northeast regions is lower.This indicates that public services supplied by local government depend not only on public demand and local economic development level,but also on the incentives and spending preferences of local government.