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Medium-term Expenditure Framework, Accrual Basis and the Control of Government Debts——Analysis of International Panel Data

【Authors】
SUN Lin, SANG Ning
【WorkUnit】
Fudan University, 200433.
【Abstract】

In recent years, the government debt sand deficit scale in many countries increased, and the gap between nominal deficit and real deficit and the government debt scale in China also showed an increasing trend. This paper uses the data of 45 countries from 1991 to 2015 to detect how medium-term expenditure framework and accrual government accounting basis influence the control of government debts, and the synergistic effect. We find that medium-term expenditure framework and accrual government accounting basis can control government debts in two ways: the direct way is constraining government expenditure and reducing the deficit level, and the indirect way is increasing government transparency and the ability to guard against government debt crisis. The control is mainly indirect in the short term, and mainly direct in the long term. The two instruments have a long-term synergistic effect in government debt control. Based on the analysis, we raise the following suggestions: further clarifying the road map about the medium-term expenditure framework, and connecting it with the government accounting reform and the government performance evaluation in the construction of government debt controlling mechanism; and promoting medium-term expenditure framework and government accounting basis reform in the correct order, to construct an environment to effectively restrain debt risk and to expand the synergistic effect.


JEL:E61, E62, H72

【KeyWords】
Medium-Term Expenditure Framework, Accrual Basis, Government Debt