Research on the Structure of Public Fiscal Expenditure Based on the Cluster Analysis Methods

Qingjie Liu, Dexiao Ren

School of Government, Beijing Normal University, Beijing, China.

DOI: 10.4236/me.2015.66066                

Abstract

The paper extracts the principal component of China’s expenditure per capita of local government based on the factor and cluster analysis method, to determine the structure of fiscal expenditure by category of basic services, senior services, economics, resource protection factor, etc. Then the paper analyzes the regional differences in the distribution of fiscal expenditure structure based on the systematic cluster analysis method. The conclusion is that Beijing, Tianjin and Shanghai are the advanced service category of expenditure growth pole, which drives around cities’ technology as well as education spending, and promotes regional economic growth.

Keywords

Structure of Public Fiscal Expenditure, Factor Analysis, Cluster Analysis

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Solow, R.M. (1956) A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70, 65-94. http://dx.doi.org/10.2307/1884513
[2]	Swan, T.W. (1956) Economic Growth and Capital Accumulation. Economic Record, 32, 334-361. http://dx.doi.org/10.1111/j.1475-4932.1956.tb00434.x
[3]	Barro, R.J. (1991) Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98, S103-S125. http://dx.doi.org/10.1086/261726
[4]	Lucas, R.E. (1990) Supply-Side Economics: An Analytical Review. Oxford Economic Papers, New Series, 42, 293-316.
[5]	Grier, K.B. and Tullock, G. (1989) An Empirical Analysis of Cross-National Economic Growth, 1951-1980. Journal of Monetary Economics, 24, 259-276. http://dx.doi.org/10.1016/0304-3932(89)90006-8
[6]	Aschauer, D. (1989) Is Government Spending Productive? Journal of Monetary Economics, 23, 177-200. http://dx.doi.org/10.1016/0304-3932(89)90047-0
[7]	Easterly, W. and Rebelo, S. (1993) Fiscal Policy and Economic Growth: An Empirical Investigation. Journal of Monetary Economics, 32, 417-458. http://dx.doi.org/10.1016/0304-3932(93)90025-B
[8]	Afonso, A. and Furceri, D. (2010) Government Size, Composition, Volatility and Economic Growth. European Journal of Political Economy, 26, 517-532. http://dx.doi.org/10.1016/j.ejpoleco.2010.02.002
[9]	Gong, L.T. and Zou, H.F. (2001) Affect Growth and Volatility of Public Expenditure on Economic Growth. Dynamic Economics, 9, 58-63.
[10]	Gupta, S., Clements, B., Baldacci, E., et al. (2005) Fiscal Policy, Expenditure Composition, and Growth in Low-Income Countries. Journal of International Money and Finance, 24, 441-463.
[11]	Guo, Q.W., Lv, B.Y. and Zhang, D.Y. (2003) Fiscal Expenditure Structure and Economic Growth. Economic Theory and Business Management, 11, 5-12.
[12]	Ramey, V.A. (2011) Can Government Purchases Stimulate the Economy? Journal of Economic Literature, 49, 673-685. http://dx.doi.org/10.1257/jel.49.3.673
[13]	Colombier, C. (2011) Does the Composition of Public Expenditure Affect Economic Growth? Evidence from the Swiss Case. Applied Economics Letters, 18, 1583-1589. http://dx.doi.org/10.1080/13504851.2011.554361
[14]	Zhang, G. and Duan, C. (2006) Empirical Study of Local Fiscal Expenditure Structure of Our Country and Economic Growth in the Region. Journal of Zhejiang University (Social Science Edition), 2, 88-94.
[15]	Kuang, X.P. and Yang, D.Q. (2013) Empirical Study of Chinese Local Fiscal Expenditure Structure Based on Factor Analysis and Cluster Analysis. Chinese Administration, 1, 105-110.
[16]	Heshmati, A. (2001) On the Causality between GDP and Health Care Expenditure in Augmented Solow Growth Model. SSE/EFI Working Paper Series in Economics and Finance.