The Effect of Fiscal Decentralization on the Efficiency of Local Governments in China
There are different views in related literature as to whether fiscal decentralization can improve local government efficiency or not.Therefore the author made an empirical study of it by using the provincial panel data of our country.First the author used the method of DEA to measured the efficiency of thirty-one provincial local governments and then measured the degree of fiscal decentralization by using fiscal revenue autonomy.After that the author made a Tobit regression analysis of fiscal decentralization and local government efficiency.The results show that the relationship between fiscal decentralization and local government efficiency is not a simple linear one,but a U type.On the other hand,the population density and GDP per capita of each province and city have significant positive effect on local government efficiency.However,the effect of time trend variable on local government efficiency is negative.