County Government and Human Scale of Fiscal System under Province——Based on the Grey Relation Analysis

Abstract

The paper has analyzed the relation between the intra-provincial fiscal system arrangements and the growth of countylevel government human size,based on the county-level time series data of Hunan province from 1995 to 2008,using the grey correlation analysis taking the index of the decentralization of fiscal expenditure and revenue、 financial degree of self-sufficiency and average per person net fiscal transfer from the perspective of fiscal decentralization and transfer payment.In this paper,it gets conclusions that there is significant positive correlativity between fiscal decentralization,transfer measured by different indexes and government human size at county level of Hunan province,and the most powerful factor which can explain the growth of county-level government human size is intra-provincial government expenditure division decided by various provinces voluntarily,the second is intra-provincial revenue division system arrangements and finance self-sufficiency degree at county level,the last is transfer payment.It shows that intra-provincial fiscal division system possibly has some kind of gene which encourages county-level government human size to expand.Such phenomenon indicates that establishing sub-national intergovernmental fiscal decentralization and moderate scale of transfer are important approaches to control sudden inflation of county-level government human size.