Simplification of Government Hierarchy and Efficiency of Public Governance

【Authors】

IN Xixi, ZHAO Hai, ZHANG Minghong & ZHANG Haifeng

【WorkUnit】

IN Xixi, ZHAO Hai and ZHANG Minghong(Xiamen University, 361005)ZHANG Haifeng(Nanjing University of Finance and Economics, 210000)

【Abstract】

Efficient state governance is an important guarantee and support for high-quality development. Improvement in state governance efficiency has become one of the six main objectives of economic and social development during the 14th Five-Year Plan period. This paper introduces the enterprise hierarchy theory to the research on the hierarchical governance in the public sector, theoretically expounds the relationship between the simplification of government hierarchy and the efficiency of public governance, reveals reasons for the differences in the economic growth effect of the simplification of government hierarchy in empirical research, and discusses the sustainability of this “policy investment” and the effectiveness of resource allocation. Based on the quasi-natural experiment of the fiscal reform of counties directly under the provincial government and expanding county-level powers in economic management, the multistage DID method is used to empirically test its impact on the public governance efficiency at the county level. It is found that the simplified government hierarchy will significantly weaken the efficiency of county-level public governance, as it expands the “control span,” weakens regulation on county-level governments and thus inhibits their efficiency of public governance. This paper emphasizes the need to build a modern public governance regulation system in the process of adjusting the relationship between government levels, modernizing the state governance system and capacity and pursuing high-quality development.

JEL：H30, H77, E62

【KeyWords】

Government Hierarchy, Public Governance Efficiency, Public Service