Abstract: Traditional studies on fiscal efforts are limited in the budget framework, neglecting the fact of large amount of long-standing off-budget revenue existing in China. Through an empirical analysis of theory and provincial panel data, this paper makes a study of the influence of local governments’ off-budget revenue on the fiscal efforts within the budget. The result shows that there exists significantly negative correlation between the two; the increase of off-budget revenue has restrained the fiscal efforts within the budget of local governments. Besides, the differences between the regions are relatively significant, the off-budget revenue in the eastern region has a more significant restraining effect on the fiscal efforts of local governments, while the western region has not. Therefore, it is of great importance to stimulate the fiscal efforts of the local governments through deepening the fiscal system reform and restraining effectively the pursuit of off-budget revenue and non-tax revenue by local governments.

Key words: local governments; off-budget revenue; fiscal effort; nontax revenue