The 60th Xi Xian Forum, sponsored by Zhongnan University of Economics and Law's (ZUEL) Center for International Cooperation and Disciplinary Innovation of Income Distribution and Public Finance (the Center) and the School of Public Finance and Taxation, was successfully held on October 21, 2024, in Wenqin Building's Conference Room 119. Zhao Xufeng, a faculty member from the School of Public Finance and Taxation at Southwestern University of Finance and Economics, was the keynote speaker at this academic forum. He delivered a speech titled "Exploration and Optimization of the Distribution Formula for Fiscal Transfer Payments". The event, moderated by Zhao Ying, a researcher at the Center of ZUEL, attracted over 10 attendees, including Wang Xiaoxiao (a faculty member from the School of Public Finance and Taxation), Zou Jianwen and Lin Jiada (researchers at the Center), and other faculty members and students.
In the fiscal transfer payment system, the primary objective of fiscal transfer payments is to promote balanced development by reducing regional disparities in fiscal resources. These transfer payments are primarily based on local objective factors and are distributed using a formulaic approach. However, in practice, fiscal transfer payments have not effectively supplemented local fiscal resources. This issue is particularly pronounced in certain areas of central and eastern China, where fiscal transfer payments appear to be positively correlated with the level of local fiscal resources—a trend that contradicts the policy's original intent. Previous studies on fiscal transfer payments have often overlooked issues related to the distribution formula and have not explored the reasons behind this phenomenon. To conduct an in-depth analysis of the complementarity between the current transfer payment system and local self-owned fiscal resources, Zhao Xufeng and his research team developed a general analytical model framework. They identified the main factors contributing to the weak complementarity of transfer payments as the deviation between standard fiscal revenue and actual revenue as well as the coefficient of transfer payments. Using various macro and micro databases, the team performed detailed calculations of the formula and obtained results for transfer payment distributions that aligned closely with actual allocations. Zhao Xufeng presented recommendations for adjusting the distribution formula and demonstrated through counterfactual simulations that optimizing the actual transfer payment scale could significantly enhance efficiency. Finally, recognizing that information asymmetry between central and local governments can result in efficiency losses, Zhao Xufeng proposed an optimal transfer payment allocation method based on the actual revenue of local governments. He provided specific recommendations for the regional reform of the transfer payment formula.
Mr. Zhao delivered an inspiring lecture to the attendees, prompting deep reflection among them. During the discussion session, participants enthusiastically shared their thoughts and actively engaged in exchanges on topics such as calculation models, research ideas, and policy implications of the research findings.
Speaker Profile
Zhao Xufeng is a lecturer at the School of Public Finance and Taxation at Southwestern University of Finance and Economics. He holds a PhD in Economics and serves as a master supervisor. His research focuses on the theory of local government finance and optimal taxation. Zhao has published many papers in journals such as the Economic Research Journal. His doctoral dissertation was recognized with the Excellent Dissertation Award of Peking University. He has led numerous projects, including the Youth Program of the National Natural Science Foundation of China and the project funded by the Ministry of Education's Youth Fund for Humanities and Social Sciences. Besides, he has contributed to various research initiatives such as a major project of the National Social Science Fund of China, a project funded by the Ministry of Finance, and a project commissioned by the CPC Beijing Municipal Committee.