On The Relationship Between Local Governments And The Transformation Of EconomicDevelopment Mode: From The View Of Institutional Innovation

Quite a few social and economic problems have been accumulated in the wake ofhigh-speed economical development in China, some of those problems are even ratherserious, such as environmental pollution, the resource waste, unfair income distribution,the lack of basic social insurance, official corruption and the dislocation of governmentfunction, etc. These long-standing problems have been already brought about threats andrisks to our country s sustainable development. And transformation of the mode ofeconomic development is imminent. Because the economic behavior and developmentmode is decided by the corresponding system arrangement and the government is thebiggest system provider, so it becomes an urgent problem to be solved through thegovernment should force institutional changes to speed up the change of mode ofeconomic development model.Base on such analysis，this paper takes the local government as research object. Itdefines the local government s roles both in practical side and in theoretical side and putsforward the goal is realizing the change of economic-development mode by the road oflocal government pushing forward institutional innovation. Exactly, such is the mainstudy and innovation of this paper:Firstly, it presents a logical frame of transformations between local government andeconomic development mode from a viewpoint of institutional innovations.Present available references focused on the functions, location and role of localgovernment in the institutional innovation and didn t relate institutional innovations tothe background of the transition of Chinese development mode. Among the references ofstudying transformations of economic growth mode, they lacked of defining andanalyzing the subject of such institutional innovations although some of thememphasized institutional innovations to gain the mode transforming. Therefore, based onexisting researches, this dissertation proposes that local governments should be the coresubject of institutional changes during such special period and accelerate the transformation speed by institutional innovations.Secondly, it analyzes the institutional foundations of extensive growth mode inChina.The previous researches of extensive economic growth mode mainly focused onanalysis about the institutions after Chinese Economic Reform. There are certainquestions in this way itself because extensive growth pattern was shaped just after thefounding of PRC. As a result, it is necessary for really finding the institutional foundationto investigate into the process of formation, development and reinforcement of theextensive growth pattern. Through studying and comparing the economic growth modebefore and after Chinese Economic Reform, the dissertation states that there are threeinstitutional foundations of the extensive growth mode. Firstly, it is the core of extensivegrowth mode that government deeply involves and intervenes into the micro businessentities. Secondly, the limited free movements of basic economic elements constructedthe insurance of the extensive growth mode. Thirdly, the officials assessment systemonly judged by the GDP which aimed at high speed growth forms the preconditions ofintensifying the extensive development mode.Thirdly, it broadens the researches in incentive and control mechanisms on localgovernment and its officials.Previous researches of institutional encourage to local government mainly have twoangles：fiscal decentralization and promotion incentive. The author considers that localgovernment s activities will also be affected by invisible management mechanisms(change of office spot, office tenure and cadres exchange in a new spot), authoritysupervising system and mechanism of investigation. But encourage from theseinstitutions was ignored by the researches available. Then the author thinks that suchhidden governance mechanism aggravated the impulsion of officials to pursue short termaims, the lack of mechanisms in authority supervising and investigating even morestimulated the opportunism of local governments.Fourthly, new constraints should be introduced into the institutional innovations oflocal government. The dissertation proposes that new variable---social power---should be brought intothe institutional innovations of local government. Previous researches of economicgrowth mode and transformation of governmental functions concentrated their attentionson institutional innovations instead of social power s influences. This dissertation sconclusion is that local people and enterprises are best qualified to speak on the check-upsystem to local government because they are the direct objects of services from localgovernment. With the increasing of such local social power, the enterprisers and personswith creative spirits will challenge various institutional barriers and will push localgovernments to carry out institutional innovations and changes.