Public Appeal and Local Fiscal Transparency：An Empirical Analysis based on Chinese Provincial Panel Data

Abstract

Fiscal transparency is not only the basic feature of the modern fiscal budget system, but also the inevitable requirement of establishing a sunshine and responsibility government. Fiscal transparency means disclosing to the public the structure, functions, public sector accounts, fiscal forecast information, etc., and ensuring that the information is timely, detailed, reliable and understandable. If local governments lack sufficient impetus to improve local financial transparency, it is clearly worth studying whether to improve local financial transparency through the bottom-up pathway. What is more, with the official implementation of the Regulation of Government Information Disclosure in 2008, public concern and enthusiasm for public information openness issues have gradually increased. At the central government level, the number of applications for information disclosure accepted by the ministry of finance increased from 17 to 1,362 in 2008-2014. At the local government level, the number of applications for fiscal information disclosure received by provincial departments of finance in China fluctuates slightly, but generally shows an upward trend. From 2008 to 2015, the provincial department of finance received 149, 222, 912, 558, 834, 892, 880 and 1616 government information disclosure applications respectively. The public’s application to local governments for fiscal information disclosure involves the three public consumptions”, the social security” information, the public pricing information and many other aspects. Based on these observations and reflections, this paper uses the panel data of 31 provinces in China from 2011 to 2015 to analyze the mechanism of public appeal for local fiscal transparency. We first use Baidu search function to structure the index which can measure the public attention on fiscal transparency problem index in different provinces and different years, then analyze the public demands for the influence of local total fiscal transparency. On this basis, we analyze the public demands for state-owned enterprise information transparency, the transparency of the social security fund and the general public budget transparency further. At the same time, there may be significant regional differences in the influence of public appeal on local fiscal transparency in coastal areas and inland areas. Therefore, we examine the regional differences between coastal areas and inland areas in which public appeal affects local fiscal transparency. Our empirical results show that the public’s focus on the three public consumption” issues will promote the fiscal transparency of the local government, the transparency of state-owned enterprises and the transparency of the social security fund. The public’s focus on social security” will promote the fiscal transparency of local government and the transparency of state-owned enterprises. However, public attention will not promote the general public budget transparency. At the same time, in coastal areas, the public’s attention to the three public consumptions” and the social security” information can significantly promote the total fiscal transparency of local governments. However, in inland areas, public appeal does not significantly affect local fiscal transparency, whether it concerns the three public consumptions” or the social security” information.