Competition analysis of trends and suggestions for improvement of the local government

Summary: Chinese fiscal decentralization, local government competition triggered GDP contest to create a "growth miracle" China's macro economy, nearly thirty years, but also paid a high price due to the traditional theory of fiscal decentralization hand voting "mechanism and" voting with their feet "mechanism in our role in the decline of the local governments in the development of social undertakings the democratic consultative and democratic supervision from residents to be ineffective.


Since the reform and opening up, with the gradual improvement of the market system in the product market and factor market development, the profit-driven economic resource mobility enhancement the central economic decentralization of local government, which gives local governments independent economic interests. competition in the local government in China fiscal decentralization led to GDP contest, created nearly three decades of China's macroeconomic growth miracle ", but also paid a high price due to the traditional theory of fiscal decentralization in hand voting "mechanism and" voting with their feet "mechanism in China's role in the decline of local governments in the development of social undertakings from democratic appraisal and democratic supervision of the residents to be ineffective. residents are most concerned about the supply of public services, achievements and promotion of local government officials far lower than the economic growth indicators, which caused a direct result of: closely related to GDP growth indicators and officials promoted as the most important local government attaches great importance to the development of social undertakings been long neglected, and in urban and rural areas, the region there is a serious imbalance between. regulate the competitive behavior of local governments to be able to play the positive effects of competition, reducing its negative effects, and ultimately economic enterprise development and social utility prosperity double harvest.

A competition in the local government development trend analysis

Competition in the local governments in the Yangtze River Delta, Pearl River Delta, Beijing, Tianjin and Liaoning Lu Bohai Bay these developed areas more widespread now the Midwest's second and tertiary industries in developed areas also outstanding, and you are to develop in depth, competition in the local government strategic behavior is changing, only in close connection with the latest development of competition in the local government, especially in conjunction with China's level of economic development in different regions of the competition the status quo, the source of dominant wide caliber of funds to the objective profiling transition period of local government structure ( the core of all government revenue, budget, extrabudgetary including manifestations of strategic interaction reaction function, the identification and measurement of the effect of competition, the incentive and restrictive mechanism design problem, so as to promote local government reasonable, orderly manner competition.

1, the developed areas of the competition is the transition from tax competition to competition in the financial expenditure. Investment tax incentives based tax competition is the low level of competition mode easily lead toward the underlying competition with unsustainable , and the system of local government expenditures competition is innovation connotation comprehensive attract mobile factors of production through the provision of high quality public goods and public services, is the high level of competition, will have the effect of "Towards the top level competition, the more more local government attaches importance to the local government competition mode. reality of our situation is: the optimal strategy of the high efficiency of local government is the implementation of competition in the high effective tax rate, high public service "spending, most of the less efficient local government excellent strategy "low effective tax rate, low public service tax competition.

Institutional innovation as the core competition means merging with each other to promote with the local government increased competition, competition mode accordingly developed to a new stage, to the institutional innovation connotation integrated and comprehensive competition mode of development. institutional competition is better than the simple mode of competition to attract production factors, competition for economic resources because of the element of competition at all levels of government rely on the power of the master by the factors of production, the law of diminishing marginal productivity constraints, institutional competition is local government by providing "system" of pure public goods to compete, good competition in the system is conducive to enhance the efficiency of the community. integration of various means of competition with the system in competition with each other, conducive to play both advantages, improve competitiveness on the long-term efficiency.

Government competition more emphasis on the evaluation of the performance of the economy. Increasingly tight resources, the local government can take advantage of land from the origin of the factors of production, the gradual loss of the "demographic dividend" advantage "labor shortage" from the southeast coast to the central and western regions spread, the increase in the cost of corporate environmental and many other reasons as soon as possible to get rid of extensive competition mode requires local governments to expand the competition to improve the economic expenditure performance, which objectively. constantly updated with the concept of governance, governance gradually to the performance of the government responsibility transformation of government. recent years, the implementation of the scientific concept of development, people's livelihood and financial concept is the deepening of the central government began to adjust and optimize the evaluation index system of local government, more and more attention to environmental protection, social security, livelihood undertakings and other public service system construction Of course, this series to the good trend of development, relying on the following premises: the development of the product market and factor market integration among regions, eliminate administrative barriers factor mobility, public finance system is implemented, the social performance appraisal and economic performance appraisal assessment for the two-pillar structure optimization.

4, competitive strategy showing the characteristics of regional diversification. Empirical results show that the financial relationship between competition and enterprise investment depends on the efficiency of the local government level, the competitive effects of the local government in China there are significant regional differences in sub-regional point of view, some developed eastern regions have gradually shifted to the advanced stage of the characteristics to provide quality public services, mainly from competing for capital to compete for first-class talent, technology and other factors of production, mainly in the central and western regions to attract the stage of the mobility of capital and large-scale construction of infrastructure. object from the competition point of view, strong capital liquidity is still competing objectives of local government. excessive competition for foreign capital liquidity, resulting in local government spending has a significant capital services-oriented, while the importance of the welfare of area residents still not enough basic public services still lag binary characteristics of China's economic differences exist in the eastern, central, western and the intensity of competition from the economic point of view, the eastern part of Hebei, Liaoning, Shandong, Jiangsu, Shanghai, Fujian more intense competition between the eastern provinces of Guangdong and other more intense competition between the central province of Henan, Hunan, Jiangxi, Shanxi, Anhui, Hubei, moderate competition between the western region.

Inter-regional mobility of economic resources, profit-driven enhancements. Various economic cross-regional flow of resources and the pursuit of profit is the objective basis of the Government's competition. The government competitive conditions, a variety of products, economic resources, production factor mobility gradually increased, the potential income differences exist between different jurisdictions is the power of economic resources between the cross-regional flows, chasing more economic benefits to the various resource flows sufficient condition for economic resources and economic activity The inter-regional flows to promote the flow of tax sources, elements of remuneration is the local budget and the ultimate source of extra-budgetary revenue, so that the flow of economic resources to work closely with the economic interests of the local government linked to competition for economic resources became a competition between local governments important goal of fiscal revenue and expenditure policies affect economic resources for the cost paid by the income, thus affecting the flow direction and flow of economic resources, it is precisely because this mechanism has intensified the competition of local government competition for economic resources.

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Second, the specification of the significance of the competitive behavior of local governments

Since the reform and opening up, the central political centralization and economic decentralization, resource flows "voting" mechanism enhanced with their feet so that local governments have the autonomy of the resources at their disposal to become independent accounting as a profit center. " GDP as the core of local officials in the performance evaluation system, people's livelihood and financial concept enjoys popular support, the institutional innovation huge space with the expected return potential competition in the local government in the new era to the in-depth development of fundamental institutional reasons. Overall, the current theory The research focuses on the origin of local government competition, competitive behavior, the effects of competition, norms and governance. theoretical research has lagged far behind compared with the rapid development of competition in the local government practice, practice development, research in this topic value is reflected in the following aspects .

1, in the allocation of resources. Helps to motivate local governments to focus on the area long-term economic and sustainable development, to reduce the negative effects of competition in the local government in China's government-led economic development model, adhering to the "competitive government" concept, in order to place The government and its officials "economic man" is assumed to be the theoretical basis, by building a utility function to include the promotion of the economic interests of local officials and political interests, and embedded in the theoretical study of government competition, competition in the local government representative research funds sources, explore the latest competition behavior of representative local government performance, competitive strategy interactive response measurement and empirical test of the competitive effects of the financial risk inherent in competition in the local government, is conducive to deepening the understanding of financial risk, social risk , guard against and defuse.

2, the officials promoted incentives, help to change the central government to local governments to GDP-based assessment system, to improve the performance appraisal system of higher levels of government to lower levels of government, and local officials to maximize their own interests compatible with the area residents welfare in the government competition analysis of competition in the local government strategic response to help deepen the understanding of the interactive behavior of local government policy, institutional innovation into the competition in the local government, incentives through the research central government to local governments, competition strategy core issues of sexual behavior and the effects of competition, will help enhance the competitiveness of the local government, is conducive to the financial system to build a "people-oriented" people's livelihood and promote social harmony and implement the scientific concept of development. depth of competition in the local governments and their officials the behavior and effects of competition, promotion negative externalities in the game, is conducive to deepening the understanding of the institutional theory promoted Championship officials promoted probability problem.

3, in the structure of fiscal expenditure. Conducive to the rapid growth of torsion and achievements related to infrastructure investment expenditures, Minsheng expenditures relative shortage situation, achieve social fairness and justice in accordance with the requirements of the scientific concept of development, local government officials to establish a scientific performance evaluation system to solve the dilemma of conflict exists between the relative performance evaluation in local government-led economic incentives with long-term performance to achieve higher levels of government to scientifically formulate rich interoperability appraisal system to provide a reference, and to reduce the region's economic development and social development system cost. become more pressing with the gradually increased, the establishment of funds for livelihood finance official performance appraisal system science workable to contain economic indicators and livelihood indicators.

In short, the competition in the local government to achieve the organic unity to promote economic growth, promote the healthy competition and cooperation of the local government to improve the governance model of local government, and strengthen the concept of local governments to provide public services, prompting the local government from the functions of the economy to the public functions shift, etc. has important practical value.

Third, the specification of the suggestions for improvement of the competitive behavior of local government

1, to achieve "do do organic unity of coordination" incentive "," play of the competitive effects of the local government needs to solve the good excitation source problem. Miracle of China's economic growth proved the central government to local governments "do (economic growth incentive to play the positive effects of competition in the local government, in view of our current competition in the local government is not sufficiently standardized and mature, inevitably there will be a negative effect in the actual operation, and to try to avoid the negative effects of necessary do coordination ", that is, the central government should break the vested interests of local governments, correction selfish behavior of good local government to play a good ability to control the overall balance of the central government on the economic development.

2, the establishment of the benefit-sharing mechanisms of competition and cooperation between local governments. Coordination of economic interests and political interests to deal with on the lower levels of government, the government at the same level of competition between the key under the system of fiscal decentralization and political centralization, local government competition and cooperation is necessary to play both good advantage between the different regions of the spontaneous formation of local governments to cooperate with each other, but also to play to the strengths of the central government to balance the interests of around the one hand, the central government through the adjustment of macro policies, such as the introduction of national industrial policy and regional development policy, to a certain extent, to avoid vicious between local government, excessive competition on the other hand, we must strive to achieve the complementary advantages of the different regions, to achieve the optimal mix of industrial policy and regional development policies positive mechanism. share by around the different interests of the industry, and to achieve a reasonable distribution around the industrial division of labor based on comparative advantage. well known, the mechanism of competition is conducive to improve the competition in the local government spending efficiency, cooperation mechanisms conducive to avoid the negative effects brought about by the competition, to achieve coordinated and healthy development of mutually beneficial regional cooperation, shared interests, favor around.

As soon as possible "enough to vote" and "voting" mechanism hand. Formation of "foot voting" "voting in hand" mechanism, able to achieve the dual constraints of local governments from the fundamental first "hand vote mechanisms, namely electoral constraint mechanism. residents through the election of the right to vote for local officials to produce a new local government, this mechanism has the advantage of the resident preference information on the display, help meet the needs of the local public. "hand vote" gives residents the right to speak of the development of the direct elections of the area. gradually increase as our people's awareness of democracy and the rule of law, as well as the network technology, communication technology, media increasingly developed, the cost of the residents to express their voice is getting lower and lower, the dissemination of information at the same time the shortcut makes between residents of different regions is increasingly easy the second, "voting with their feet" mechanism, that local governments provide area residents according to the preferences menu combinations for residents to choose different levels of taxation and public goods, the residents will be according to their preferences to select the appropriate level of taxation and public product portfolio, this two-way choice between the free movement of people to achieve. "enough to vote" mechanism suggests that in the face of labor mobility, local government officials in the competition in order to achievements inevitable will improve the level of public goods supply, the promotion of government officials in response to the demand for the information of the citizens in the area of ​​public goods, so as to realize the the populace required for the effective supply of public goods.

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