1、2100 单词， 中文 3200 字 外文题目 : The Effect of Local Government Investment on Economic Growth and Employment: Evidence from Transitional China Zhang Weiguo, HouYongjian Based on the panel data of 28 provinces in the year of 1987-2001,this paper examines the effects of the local government investment on eco
2、nomic growth and employment.The empliricalresult showthat the local government investment plays a significant positive role in economic growth and employment.However,while the proption of local government investment to GDP had a remarkable rise after 1998,the elasticity of local government investmen
3、t on economic growth declined,which shows that there is a big room for raising the efficiency of local government investment.Moreover,the empirical examination shows that although local government investment had positive effect on employment,the elasticity had a decrease after 1994 when the tax-shar
4、ing system reform was put into practice.This shows that the positive role of local government investment on employment is also limited.This paper argues that the role of local government ias investors must be weaked and local governments of different levels should lessen direct economic intervention
5、 and concerntrate on public regulation. The transiting process of China from traditional planning economy to marketing economy is also a process for governments to change their roles. In this transition process. China takes a path of gradual reformation， and the central government gradually looses i
6、ts direct control on economy and lessens its administrative power on state-owned economy. However.the Central Government did not give enterprises the complete administrative power； instead. it passed the ad. ministrative power to local governments. Thus， the local governments gained more power in ec
7、onomie decision， in examining large investment projects， and in issuing license and in controlling land resources. This made the local governments have great power on intervening local economic development. On the other hand， the establishment of fiscal decentralization system in a great degree inte
8、nsified the economic interest of local governments. which urged the local governments to have more incentive to develop Local economy. Under the fiscal decentralization system.the revenue of local governments highly depends on the local economic development. ONLYwhen the local economy has a good per
9、formance， could the tax base be expanded， and revenue be increased. So that the local governments have great incentive to develop the local economy.In addition. The growth rate of GDP and the employment situation are very important indexes for examining officials achievements； this further strengthe
10、ns the incentives of local officials to develop local economy. Thus local governments of different levels usually play a role of entrepreneurs in prorooting local economic development. The most direct effective measure for local governments to develop local economy is to raise local investment level
11、 through various ways. In this way the proportion of the investment projects of local governments to national fixed investment grows continuously； the investment expenditure from local governments themselves keeps a high level. With the establishment of fiscal decentralization, the capability of loc
12、al governments in controlling the revenues within budget increases remarkably. In addition， local governments have a large pertion of rights in disposing the revenues both outside the budget and outside the system； this makes local governments have finance resources to invest in infrastructure const
13、ruction. In fact. in the total governmental investment， the proportion of investment within budget decreases increasingly,and that outside the budget increases increasingly,and the most of investment outside the budget is raised and used by local governments. Moreover， in order to attract more inves
14、tment from outside so as to promote the local economic development. while the revenues both within and outside the budget are insufficent for the demand of investment expenditures. some local governments take a path of raising a loan from outside to speed up the urban development. In the past years，
15、 many local governments were engaged in the so cal led“city management”,speeded up the city development， renewed the infrastructure in cities in large scale. and established economic developing areas .These investments take a large portion in national total investment. From above analysis we can see
16、 that local governments have been one of the main investors in Chinas economic life. At present.China s fixed investment has changed from that the central government plays a dominant role to that local governments play a dominant role.Local governments of different levels have become an important pa
17、rticipant in Chinas economic life. We must consider the effects of local government investment on economic growth and employment when studying the latter two. Based on the panel data of 28 provinces in th year of 1987-2001. this paper examines and analyses the effects of the local government investm
18、ent on economic growth and employment. The structure of the paper is as following: the second part is literature review；the third part is analysis and design；the forth part is the data and result； the fifth part is the conclusion and revelation. We expect to examine if the local government investmen
19、t have remarkable effects on employment， so we take the local government investment as the main explanatory variable in making the relevant model. In addition. in line with other variables affecting employment， we added some control variables. According to“Philips carve”. there is a substitution rel
20、ationship between inflation rates and unemployment rates .This paper introduces CPI into the empirical test of employment， so as to test if the inflation level has remarkable effects on employment in China. Moreover, the number of emoloyment in state-owned enterprises takes a great ratio of total em
21、ployment. It shows that the estimation value is evidently not ， which proves that the proportion of employment in state-owned sectors has a strong explanatory capability to the growth rate of employment. There are very few literatures which directly study the effects of local government investment o
22、n economic growth and employment. most of literatures start from fiscal decentralization. A World Bank report points out that though China has a single governmental system,Chinas system has a strong character of federalism because Chinas finance system is highly decentralized on so many different le
23、vels as Central Government 31 provinces,331cities,2,109 counties and 44,741 towns， therefore.QianYingyi and Weingast regard this federalism of China， which formed from fiscal decentralization,as market preserving federalism with Chinese character,QianYingyi and Roland point out that the incentive of
24、 government to subside inefficient projects is determined by the trade of between political interests and economic costs,and the economic costs depend upon the degree of governmental decentralization.They insist that,with the free movement of nonstate-owned capitals,fiscal decentralization has the e
25、ffect of hardening the budget restriction of the state-owned enterprises controlled by local governments. This is because that the competition of attracting investment of local governments may generate externalities. This makes the opportunity cost of subsiding the inefficient state,owned enterprise
26、s to be high,therefore weakens the incentive of local government to save Iosing enterprises.They also believe that such government organizational reformation as fiscal decentralization is an important aspect for the transition from planning economy to marketing economy.Lin Yifu and Liu Zhiqiang ,emp
27、loying provincial data assessed the effects of Chinas fiscal decentralization started from l 980s on the economic growth. They found that,after controlling the effects of other reformations occurred at the same time,fiscal decentralization raises the provincial GDP growth rate in per capita aspect,t
28、his shows that fiscal decentralization promotes economic growth through raising the efficiency of resource distribution.They believe that the positive effects offical decentralization on economic development are due to that,relative to central government， the provincial governments have information
29、advantage in satisfying local demand； thus， they could provide better public goods and services which have large effects on local economic environment. Zhang Weiying and Su Shuhe argue that the decentralization happening in the early of 1980s led to regional competition which led to privatization. T
30、he establishment of decentralized system accelerates the incentive of local governments to pursue profit， which causes the high competition between local governments,which facilitates the market oriented movement of the whole economy.Due to the intense regional competition in the product market， eac
31、h region has to make efforts to decrease its production cost so as to occupy as pace in the market competition.In order to effectively cut the cost,local governments make such choice as giving the whole or part of share to managers to give them incentives,which accelerates the growth of market and e
32、conomic development. There are also some writers who have noted the negative effects of local government investing behavior. As to the aspect of reducing the efficiency of social resources distribution,Lu Ming,Chen Zhao and Yan Ji who take the angle of the isolation of regional economy， Xu Ying who
33、take the angle of conflict of regional economy, Hu Rongtao， Zhang Xuying and Su Mingbing who take the angle of the similarization of industrial structure， with game theory， have respectively analyzed the strategic behavior of local governments pursuing self-profit which led to the loss of social res
34、ources distribution efficiency. The Research Group of“The Competition of Chinese Local Governments”analyzed the negative performance of local government in competition. The result shows that， after China practiced a new positive fiscal policy,though local governments had great incentive to invest in
35、 city infrastructure construction with the impetus of central government loan， which made the investment expenditure of local government and its proportion to GDP are increasing,the eficiency of these investment declined. The empirical result of this paper shows that the local government investment
36、has a very evident positive effect on economic growth. The empirical result also proves that after the establishment of the tax-sharing system in 1994,the elasticity of local government investment to economic growth went up. But this elasticity went down when local government investment increased gr
37、eatly after 1 998. The empirical test result also shows that the elasticity of local government investment to employment decreased when the tax. sharing system reforIn was put into practice after 1994. It shows that though the local government investment increased rapidly in the past years and playe
38、d an important role in economic development， its positive effect on employment was limited. This explains why the elasticity of GDP to employment tends to decrease and the employment pressure keeps high while Chinas economy keeps rapid growth. The empirical test result shows that. in the process of
39、transition， central government gradually decentralized most of the control power and passed it to local governments.The local governments,as an independent economic actor,participated in the economic life actively,expanded the investment with great effects so as to develop the local economy. This is an important step in
