Local Government Debt Risk, Fiscal Expenditure Efficiency and Economic Growth

摘要

Government debt has an impact on economic growth, but there is a big difference when the local government's fiscal expenditure is efficient or not. This paper tries to explicit the impact of local government debt risk on economic growth, in the case of the efficiency of fiscal expenditure. We assess the local government debt risk by the debt ratio and gain the fiscal expenditure efficiency with Data Envelopment Analysis (DEA). The empirical study shows that the relationship between the efficiency of fiscal expenditure and local government debt risk is significantly negative, and the risk of local government debt has a significantly negative impact on the economic growth, with the data of 28 provinces, municipalities and autonomous regions of China for the period 2011-2013.