Local Government Debt Governance in China in the Past 70 Years: Review and Prospect
- GUO Yuqing, MAO Jie
- GUO Yuqing (Nankai University, 300071)MAO Jie (University of International Business and Economics, 100029)
This paper attempts to make a panoramic review of local government debt governance in the past 70 years of China. Based on theoretical survey of debt characteristics in the transition period, it gives the strategic prospect of debt governance in the new era.The paper holds that local government debt governance in the past 70 years has gone through five stages of Planned Regulation, Exploration & Expansion, Wide Fluctuation, Pilot Expansion and Comprehensive Transition, which is a prudent tradeoff process between “incentive” and “control” objectives to deal with the strategic financing game of local governments and to promote the standardization, transparency and institutionalization of debt governance. In the new era of socialism with Chinese characteristics, the idea of social and economic development has undergone historic changes. China's debt governance mode needs to change from the conventional quantitative governance based on GDP to performance governance oriented towards long-term benefits, and improve the quality and efficiency of debt financing. Under the guidance of new development concepts, debt governance in the new era can continue to release reform dividends from aspects of institution, structure, mode and technology, promote strategic adjustment orderly, and lay a foundation for normal and safe fiscal operation and the sustainability of local government debt financing.
JEL：E62, H74, H77
- Local Government, Debt Governance Mode, Debt Financing