The Impact of Local Debt on the High-Quality Development of the Local Economy

China has entered a new stage of economic development, with the economic growth model transforming from the pursuit of “quantity” to an emphasis on “quality”. The economic structure undergoing a continuous process of optimization and adjustment, and the pace of transformation of the economic growth rate accelerating significantly. As an important way of local government financing, local debt is facing a serious imbalance between revenue and expenditure, which poses a substantial challenge to the realization of high-quality economic development in China. This paper adopts a panel data regression analysis framework for the relationship between local debt and high-quality economic development in 30 provinces and cities nationwide during the period from 2017 to 2023. The findings show that the expansion of local government debt scale hinders the process of scientific and technological innovation to a certain extent, which in turn weakens its positive effect on the high-quality development of the economy. In addition, local debt also indirectly contributes to the level of high-quality economic development by profoundly affecting the degree of openness to the outside world. Based on this, this paper puts forward a series of targeted policy recommendations for the current situation of local debt.