Fiscal Pressure and Local Government Public Service Expenditure Bias : A Quasi-Natural Experimental Analysis Based on China's Large-Scale Tax Reduction

In the context of large-scale global tax cuts, government social expenditure continues to expand. Taking China's tax reduction policy since 2016 as a quasi-natural experiment, this paper investigates the impact of local government fiscal pressure on welfare expenditure by intensity difference-in-difference model. Results show that local governments markedly enhance the education expenditure and reduce the total social security and welfare expenditure, which is more significant in areas with low financial self-sufficiency rates and weak government capacity. In terms of the influence mechanism, the competition between local governments is an important factor affecting local government public service expenditure