Currently, the role of local governments and their the financial burden retrograde local autonomy system. 41.8% of the size of the local finance is the matching funds in the form of state grants support projects and is naturally accompanied by the bur...
Currently, the role of local governments and their the financial burden retrograde local autonomy system. 41.8% of the size of the local finance is the matching funds in the form of state grants support projects and is naturally accompanied by the burden of local governments. Despite fiscal power of local governments has weakened over the last decade, the fiscal burden of local governments for supporting state grants support projects becomes much more. In particular, the effect of state grants support projects has been not exactly investigated and allocation of financial resources sharing are often hinder the efficiency of the projects.
State grants support projects should be improved as follows. First, state grants support projects tend to be too fragmented , so that fiscal consolidation of state grants will be needed. Second, state grants support projects by limiting the financial support of the targe should be reduced gradually, because central government and local governments promote the practice of projects without the performance evaluation of state grants support projects and it tends to show. Third, the supporting rate can be determined depending on the scope and impact of the project or the nature and character. Fourth, the state grants support projects is to achieve a specific goal, so goal-setting and performance management operating system should be set. In oder to manage seamless performance for state grants support projects, goal setting and the comprehensive performance management system are needed. Fifth, considering the nature of state grants support projects affairs of local governments have to transfer to local governments with the unique business.