Abstract: The legalization of government budgets and the disclosure of financial information are the core goals of the reform of public budget governance, which are crucial for achieving the modernization of local financial governance. From the new perspective of legalizing government budgets, and taking advantage of the implementation of the new Budget Law in 2015, this study empirically analyzes the impact of budget system reform on the efficiency of local financial governance by employing the Intensity Dual Difference Model (DID). The findings show that the implementation of the new Budget Law is conducive to the disclosure of financial information, thereby improving the efficiency of local fiscal expenditure. Further analysis shows that the legalization of government budgets can improve the efficiency of local fiscal expenditures by improving fiscal transparency and strengthening government audit supervision. The more perfect the market institutional environment, the higher the efficiency of government governance, and the higher the level of public attention, the more obvious the improvement effect of the implementation of the new Budget Law on the efficiency of local financial expenditure will be. Therefore, it is necessary to accelerate the construction of the rule of law in government budgeting, promote the transparency of financial information, improve the long-term mechanism of budget supervision, constraints, and performance management, improve the governance capacity of local governments, establish a budget collaborative governance system with good interaction between the government and the public, and fully leverage the financial governance effect of the implementation of the new Budget Law.

Key words: legalization of government budget, fiscal transparency, local fiscal efficiency, the New Budget Law