Fiscal Decentralization,Economic Openness and Governments’ Expenditures for Construction and Social Security——Based on City Panel Data in Henan Province

Abstract

Used the panel data of 18 cities in Henan Province during 2000～2010,two hypotheses-the fiscal decentralization hypothesis and the hypothesis of economic openness were tested.Through LSDV method,the analysis found that,during the period of economic construction,the degree of fiscal decentralization plays a positive role,and economic openness has no effect on economic construction expenditure.Meanwhile,during the public finances period,the increase in economic openness will lead to the increase in government social security expenditure,and fiscal decentralization has no effect on social security spending.results show that the shift of the ideal of public finance system is an optimistic outlook.