Fiscal Decentralization and Unruled Behavior of Local Government in China

Chinese Fiscal Decentralization is ongoing in the circumstance of unbalanced system, and the local government's multi-goal function determines that the choice of behavior is based on the maximization of its general profits. So the existing Fiscal Decentralization has negative effects, such as law criterion of the relationship between the Central and local government is lack, the intergovernmental boundary of authority and duty are ambiguous, the local government's financial source is limited, the actual system for assessing the achievement of the magistrate is unscientific, and the weak obligation of the magistrates offers a loose circumstance for their nonstandard behavior. All these will lead to an unruled behavior. Therefore, we put forward the countermeasures such as making fiscal system normative and perfect with the goal of public finance, and establishing the scientific system of evaluating performance and forming the effective obligation system.