Research on the Poverty Reduction Effect of Fiscal Transfer Payment: An Empirical Study Based on National Poverty-stricken Counties

Abstract

Since the reform of tax-sharing system in 1994, the central government has begun to implement large-scale fiscal transfer payment to the poor areas in central and western China, but no consensus has been reached on the effect of fiscal transfer payment on poverty reduction. However, in previous studies, public transfer payment refers to the urban public relief system, agricultural subsidies, rural old-age security, urban and rural subsistence security, etc., not including other types of inter-governmental fiscal transfer payment; the data used are mainly from micro-survey data, and focus on the income level of poor population, household income, labor supply and so on, not involving the macroeconomic indicators of poor areas, and lacking inspection on the ability of “blood transfusion” and “blood-making” of fiscal transfer payment.In this paper, the intergovernmental fiscal transfer payment is selected as the core indicator, and it is no longer limited to the public transfer payment for families. Then, we construct a multi-dimensional index system reflecting the poverty reduction effect of poverty-stricken areas, and analyze the effect of fiscal transfer payment on poverty-stricken areas from a macro perspective. Firstly, the impact of fiscal transfer payment on absolute indicators such as poor population, poverty incidence rate, per capita GDP, rural per capita electricity consumption and total mechanical power per household in poverty-stricken areas is more significant. The poverty reduction effect of fiscal transfer payment is better, but there is also the situation that GDP grows rapidly in some regions, but the per capita financial income “does not rise but falls”, that is, the efforts of fiscal revenue are relatively low. Secondly, the effect of fiscal transfer payment on poverty reduction is not ideal or even significantly negative for the ratio of per capita GDP, per capita fiscal income and per capita electricity consumption. This shows that although fiscal transfer payment improves the absolute production and living standards of poor areas, compared with the national average level, it does not increase significantly, but decreases. Solving the problem of relative poverty is still the focus of all future work. Thirdly, in the study of classified transfer payment, the effects of tax return, general transfer payment and special transfer payment are obvious, and the effect of special transfer payment is better than that of general transfer payment.The academic value of this paper is mainly reflected in three aspects: Firstly, it is conducive to improving the current fiscal transfer payment system. Under the background of enhancing the general transfer payment and reducing the special transfer payment, we need to focus on the characteristics of poor areas, do not take “one-size-fits-all” reform measures. Secondly, it is beneficial to enhance the poverty reduction effect of fiscal transfer payment in poor areas and bring into play the use efficiency of fiscal transfer payment. Thirdly, it is conducive to objectively evaluating the poverty reduction effect of fiscal transfer payment. Through the construction of multi-dimensional index system, this paper can objectively reflect the economic development status of poverty-stricken areas and the regional gap with other regions, and provide certain reference for building a long-term mechanism to solve relative poverty in the “post-poverty era” in 2020.