财政压力与地方政府融资平台的兴起

Fiscal Stress and the Rise of China's Local Government Financing Platforms

本文利用2004-2006年取消农业税的自然实验,使用1994-2009年的县级面板数据首次从实证上检验了财政压力导致地方政府融资平台成立这一假说.利用双重差分模型研究发现,取消农业税改革导致的财政冲击越大,县级地方政府在改革后设立融资平台的概率越高.这一发现在不同模型设定下保持稳健,并通过了基于改革前样本和利用其他税种收入变动构造的安慰剂检验.我们还排除了上述发现由扩权强县和财政省直管县等其他财政制度改革驱动的可能性.进一步的分析表明,面临更激烈的区域间竞争、初始财政禀赋较低的县更倾向于设立融资平台.本文丰富了关于财政压力对中国地方政府行为影响的研究,有助于更好地理解中国财政体制与金融制度之间复杂的关联性.

China's local governments play a key role in the formation of local infrastructure(Zhang and Xiong,2019).It is not feasible for local governments to fund massive infrastructure projects through regular tax revenue or land sales.However,China's Budget Law,enacted in 1994,strictly prohibited local governments from raising debt.Local Government Financing Platforms(LGFPs)were created by China's local governments to circumvent this legal restriction(Liu and Xiong,2018;Cong et al.,2019).A local government will inject land reserves or future land sale revenues into the LGFP as collateral to raise money.In a typical arrangement,an LGFP carries either explicit or implicit guarantees from its affiliated local government.It has long been hypothesized that local governments'fiscal stress is the root cause of the rise of China's LGFPs.However,causal evidence supporting this hypothesis remains scarce.This paper exploits the quasi-experiment of 2004-2006 China's Agricultural Taxes Abolition Reform to identify the causal effect of local government's fiscal stress on the establishment of LGFPs.Chinese counties encountered heterogeneous shocks in this reform because they had different initial levels of reliance on agricultural taxes.We therefore apply a differences-in-differences(DID)strategy to compare the outcomes before and after the reform across counties with different levels of fiscal stress.We do not have access to the financial statements of county-level LGFPs,so as a feasible method of identifying their establishment,we collect the data on the foundation of each LGFP as disclosed by the China Banking Regulatory Commission(CBRC).Our main outcome variable of interest is a time-variant dummy indicating the existence of an LGFP in a given county.We derive cross-sectional fiscal stress intensity from changes in agricultural tax income and related special subsidies before and after the reform.We also collect detailed data on county-level fiscal and economic outcomes.We find that a one-percentage-point increase in the degree of fiscal stress induced by the reform increases a county's probability of establishing LGFPs by 0.162 percentage points.The event study result indicates that counties in the treatment and control groups exhibit parallel pre-trends.Our finding survives a full battery of robustness checks:(i)controlling for a flexible time trend varying by a full set of pre-determined county attributes to eliminate potential confounding factors that might generate a non-parallel trend in the outcomes of interest,(ii)using an alternative definition of treatment intensity,(iii)using standard errors clustered at the prefecture level,(iv)controlling for county-specific linear trends;(v)using a subsample without county-level cities,and(vi)controlling for county party secretary fixed effects.We also conduct two placebo tests by utilizing a fake policy time to construct our independent variable and making changes in other types of tax income(e.g.,individual income tax and corporate income tax).Further investigation suggests that our finding is not driven by the Province-Managing-County(PMC)reform,although it does have a significant moderating impact on the probability of establishing LGFPs.We also find that the policy effect varies substantially between counties with different levels of political competition pressure and initial levels of regional fiscal endowment.This paper contributes to the research on China's LGFPs and provides the first causal evidence for their institutional origin in China's fiscal system.In a broader sense,we contribute to the large body of literature on local governments'strategic responses to fiscal reforms(Han and Kung,2015;Chen,2017).There are substantial concerns both inside and outside China about the stability of China's local government debt.This paper contributes to our understanding of how fiscal reform led to the deeper involvement of China's local governments in the financial system.Our findings yield rich policy implications.In the medium term,the Chinese central government needs to design a more sustainable mechanism to fund local fiscal budgets.One possibility is a property tax levied on real estate assets,as is common in many developed countries.In 2011,China conducted policy trials for levying property tax on second homes in Shanghai and Chongqing.As previously sold land leaseholds gradually reach their maturities,the subsequent land renewal process provides a natural opportunity for local governments to collect additional fees or taxes on real estate properties.