Abstract: To study the impact of fiscal decentralization and promotion competition on the public services for residences is conductive to the improving of the degree of residents' satisfaction with the public services, thereby increasing people's well-being. By matching the individual micro-data of Chinese General Social Survey (CGSS) from 2013 to 2015 with the data of the prefecture-level cities, this paper empirically analyzes the affecting mechanism of the vertical fiscal decentralization and the horizontal promotion competition onthe residents'satisfaction with public services. The findings show that the vertical fiscal decentralization and the horizontal promotion competition jointly affect the residents' satisfaction with the public services, and that there is a significant complementary relationship between the two. The increase of the degree of competition makes the fiscal decentralization produce a positive influence on the residents' satisfaction with public services, however, insufficient competition will play an inhibiting role. It is found when analyzing the selection of national civilized cities that the special treatment action can increase the local promotion competition pressure in a short period, thus playing a regulating role in the fiscal decentralization; however, this kind of role is not significant in the long term. Therefore, in the areas where effective horizontal competition is difficult to form, it is necessary to let the central government play a role of overall planning, promote the equalization of public services, and at the same time strengthen the regional competition in the public service area, give full play to the residents in supervising the governments, promote the long-term evaluation mechanism in the area of public services, and establish a dynamic appraisal mechanism of the special treatment action.

Key words: fiscal decentralization, promotion competition, residents'satisfaction with public service, national selection of civilized cities