Can Autonomous Debt Issuance by Local Governments Improve the Quality of Economic Development？ A Quasi-Natural Experiment Based on the “Self-Repayment” Reform of Local Debt
Summary:
With the official implementation of the new Budget Law in 2015, which clearly stipulates that local governments must raise debt in a “self-issuing and self-repaying” manner, the reform of local government debt management entered a new era. The comprehensive “self-repayment” reform of local debt has changed the way local governments raise debt for finance, with the “open front door” policy allowing them to issue government bonds within limits, and the “block back door” policy curbing their implicit debt, such as interest-bearing liabilities of local financing platforms. Intuitively, the policy shock by local governments' autonomous debt issuance resulting from the reform will facilitate local governments' efforts to raise funds autonomously according to the economic development needs of their region, while simultaneously imposing hard budgetary and market constraints on local government debt raising and improving local governments' performance in the use of debt funds. Especially in the context of China's economy entering a stage of high-quality development, an analysis of the economic effects of the reform is of great practical importance as it can assist in enhancing the promotion of high-quality development of regional economies by ensuring a standardized, safe, and efficient government debt financing mechanism. Using the comprehensive “self-repayment” reform of local government debt as a quasi-natural experiment, we empirically analyze the effect of the reform on the quality of regional economic development. The main findings are as follows. (1) The results of the baseline regression indicate that both the “open front door” and “block back door” policy shocks that form part of the reform of local government autonomous debt issuance have a significant and positive impact on the quality of regional economic development. (2) The results of the mechanism test show that the “open front door” policy shock by local government autonomous debt issuance has a scale effect by increasing the use of debt, the effective supply of livelihood public goods, and effective investment in public infrastructure, which is conducive to the realization of regional economies of scale. In terms of structural effects, the “block back door” policy shock can alleviate the crowding-out effect of debt and reduce dependence on land finance, which is conducive to the improvement of resource allocation efficiency and factor input efficiency. (3) A further heterogeneity analysis shows that the above positive effects are weakened in areas with high levels of implicit debt financing before the reform. This paper contributes to the literature in three aspects. (1) In terms of policy contributions, we conduct a policy evaluation of the comprehensive “self-repayment” reform of local debt to determine how to further improve and optimize the unified system of “borrowing, using, managing, and repaying” local debt and thus to enhance the promotion of high-quality regional economic development; we also provide empirical support for increasing control over local government debt risks and achieving the sustainable development of local government debt. (2) In terms of our research methodology, we use the “self-repayment” reform of local debt as a quasi-natural experiment and select the intensity difference-in-differences method as the main empirical model to test the effects of the “open front door” and “block back door” policy shocks on the quality of regional economic development caused by the reform of local government autonomous debt issuance, and to capture the important debt system factors affecting the quality of regional economic development. (3) In terms of research ideas, based on the perspective of the whole process of “borrowing-using-repaying” government debt, we systematically analyze the impact mechanism of local governments' autonomous debt issuance policy on the quality of regional economic development at two levels, namely the scale effect and the structural effect, reveal the inner mechanism of the change in local governments' debt financing behavior on the quality of regional economic development, and provide evidence that deepens understanding of the correlation between local governments' debt financing behavior and changes in the quality of regional economic development. Based on the findings, we propose the following policy recommendations to improve the local government debt management system. First, China must further its formation of a transparent and standardized debt raising system oriented toward high-quality development and promote the construction of a market-oriented system for local government bonds. Second, it is necessary to further optimize the investment and use of local government bond funds and strengthen the performance governance of debt projects. Finally, we recommend further accelerating the reform of the local government investment and financing system, and strictly controlling the scale of expansion of local governments' implicit debt.
洪源, 胡慧姣. 地方政府自主发债是否有利于提升地区经济发展质量？ ——基于地方债全面“自发自还”改革的准自然实验分析[J]. 金融研究, 2023, 515(5): 77-95.
HONG Yuan, HU Huijiao. Can Autonomous Debt Issuance by Local Governments Improve the Quality of Economic Development？ A Quasi-Natural Experiment Based on the “Self-Repayment” Reform of Local Debt. Journal of Financial Research, 2023, 515(5): 77-95.
[1]曹婧、毛捷和薛熠,2019,《城投债为何持续增长:基于新口径的实证分析》,《财贸经济》第5期,第5～22页。 [2]陈诗一和汪莉,2016,《中国地方债务与区域经济增长》,《学术月刊》第6期,第37～52页。 [3]刁伟涛,2018,《中国地方政府债务风险(2014—2017)》,社会科学文献出版社2018年12月。 [4]胡志平,2018,《经济高质量发展的公共服务动力》,《社会科学研究》第6期,第42～50页。 [5]洪源、陈丽和曹越,2020,《地方竞争是否阻碍了地方政府债务绩效的提升？——理论框架及空间计量研究》,《金融研究》第4期,第70～90页。 [6]胡奕明和顾祎雯,2016,《地方政府债务与经济增长——基于审计署2010—2013年地方政府性债务审计结果》,《审计研究》第5期,第104～112页。 [7]胡李鹏、王小鲁和樊纲,2020,《中国分省企业经营环境指数2020年报告》,《金融评论》第5期,第2页。 [8]龚六堂和林东杰,2020,《资源配置效率与经济高质量发展》,《北京大学学报(哲学社会科学版)》第6期,第105～112页。 [9]冀云阳、毛捷和文雪婷,2021,《地方公共债务与资本回报率——来自新口径债务数据和三重机制检验的经验证据》,《金融研究》第6期,第1～20页。 [10]刘贯春、程飞阳、姚守宇和张军,2022,《地方政府债务治理与企业投融资期限错配改善》,《管理世界》第11期,第71～89页。 [11]梁若冰和王群群,2021,《地方债管理体制改革与企业融资困境缓解》,《经济研究》第4期,第60～76页。 [12]吕炜、周佳音和陆毅,2019,《理解央地财政博弈的新视角——来自地方债发还方式改革的证据》,《中国社会科学》第10期,第134～159页。 [13]毛捷和马光荣,2022,《政府债务规模与财政可持续性:一个研究综述》,《财政科学》第11期,第10～41页。 [14]祁玉清,2020,《地方政府专项债券用作项目资本金的认识偏差辨析及实现途径探讨》,《宏观经济研究》第12期,第20～28页。 [15]孙广召和黄凯南,2019,《高铁开通对全要素生产率增长率的异质性影响分析》,《财经研究》第5期,第84～98页。 [16]司海平和李群,2020,《地方发债、债务投向与产业结构升级》,《工业技术经济》第1期,第136～143页。 [17]宋傅天和姚东旻,2021,《“城投部门”议价能力与地方政府债务扩张》,《管理世界》第12期,第92～110页。 [18]吴敏、曹婧和毛捷,2022,《地方公共债务与企业全要素生产率:效应与机制》,《经济研究》第1期,第107～121页。 [19]熊虎和沈坤荣,2019,《地方政府债务对创新的挤出效应研究》,《经济科学》第4期,第5～17页。 [20]余靖雯、陈晓光和龚六堂,2018,《财政压力如何影响了县级政府公共服务供给？》,《金融研究》第1期,第18～35页。 [21]余泳泽和李启航,2019,《城市房价与全要素生产率:“挤出效应”与“筛选效应”》,《财贸经济》第1期,第128～143页。 [22]张健华和王鹏,2012,《中国全要素生产率:基于分省份资本折旧率的再估计》,《管理世界》第10期,第18～30页。 [23]Chen, S. X. , 2017,“The effect of a fiscal squeeze on tax enforcement: Evidence from a natural experiment in China”,Journal of Public Economics, 147: 62～76. [24]Cochrane, J. H., 2001, “Long-term debt and optimal policy in the fiscal theory of the price level”, Econometrica, 69(1): 69～116. [25]Eberhardt, M., and Presbitero, A. F. , 2015, “Public debt and growth: Heterogeneity and non-linearity”, Journal of international Economics, 97(1):45～58. [26]Jacobson, L. S., R. J. LaLonde, and Sullivan, D. G., 1993, “Earnings losses of displaced workers.”, The American economic review, 685～709. [27]Kumbhakar, S. C., and Lovell, C. K., 2003, “Stochastic frontier analysis”, Cambridge university press. [28]Krugman, P. R. ,1988, “Market-based debt-reduction schemes”, NBER Working Paper, No.2587. [29]Nuun,N.and N.Qian, 2011, “The Potato's Contribution to Population and Urbanization:Evidence from a Historical Experiment”, The Quarterly Journal of Economics, 126(2): 593～650. [30]Panizza, U. and Presbitero, A. F. , 2014, “Public debt and economic growth: is there a causal effect？”, Journal of Macroeconomics, 41(2): 21～41. [31]Reinhart, C. M., and Rogoff, K. S., 2010, “Growth in a Time of Debt”, American economic review, 100(2): 573～578.
