Research on Provision of Local Public Goods under the Fiscal Decentralization System in China

In China, the effect of fiscal decentralization on local public goods provision has always been concerned since 1994 fiscal reform. This article describes the status quo and the problems of local public goods provision after measuring two indicators of local expenditure. Then, we analyze the two causes of horizontal imbalance on public goods: one is fiscal decentralization theory is economic efficiency-oriented and does not care about social fairness; the other is fiscal accountability, power and capacities do not match. The suggestions are as follows: construction the fairness dimension of fiscal decentralization theory, rebuild China's fiscal system in which accountability, power and capacity are unified and strengthen the effect of fiscal transfers.