Behavioral Logic, Governance Model And Economic Performance Of Inclusive Government

How a big country can evolve an effective governance structure, build the appropriate governance model and tend to perfect governance levels? This is an important question for economics. China’s economic reforms so far basically remain the registration system which lead to division between urban and rural sectors, taxation system which related to economic decentralization, and several characteristics which is outstanding in relations society. In the early stage of economic development, these political, economic and social structures play a certain positive role for the accumulation of capital, technology absorption and innovation, market incentives and fulfill of contracts. But they also brings a lot of the cost of reform, such as expansion of income gap and the public services gap between urban and rural areas, interregional and interpersonal, and also including the associated structural imbalances. Income gap continued to widen is not conducive to economic growth, poverty relief and social mobility, due to the serious income gap, contemporary Chinese economic growth and social harmonious development is faced with enormous challenges, which kind of governance model for large stronger country do we need in the future? What is the operating mechanism of this governance model? Whether it have a general rules and reference implications?This paper attempts to research their behavior logic, governance and economic performance of the above problem from production, development and inclusive character of government, with one hand under the theory of the state to clarify the different economic transition process in the context of governance functions to develop well, and summed up in the economic and social development process have different roles and role boundaries and role of size, on the other hand, can be more in-depth analysis of economic development because the appropriate institutions and governance in the role of the government, based on the fact that China’s economic development and existing development theory, growth theory and the theory of the state, we attempt to build an inclusive type of theoretical framework, and conduct a comprehensive reform of the possible future prospects, especially for China might inclusive growth path with practical significance.Based on building theoretical framework of inclusive and analytical framework of inclusive government’s behavior and its performance, this paper emphasize the appropriate institution(patent institution, fiscal decentralization institution and income distribution system) and government intervention (government behavior, the size of government and government efficiency) are playing the role of inclusive governance. Through economic growth (using the physical capital, human capital, technological progress) and share the results (initial distribution which focus on efficiency, secondary distribution which focus on fairness), the appropriate institution play the role of economic growth inclusion. Through social mobility (eg intergenerational mobility and structural mobility) and the inclusive development (such as household registration reform, educational equity), the appropriate institution can achieve the goal of social development inclusion, through idea prosperity (freedom of idea, accumulation of knowledge capital), the appropriate institution can achieve the purpose of ideas market inclusion.This paper analysis the concept of the marketplace of ideas, classification and characterization, and comprehensively demonstrate the marketplace of ideas affect economic growth mechanism for the first time, we propose a suitable system concepts and features, and establish a new endogenous growth model for the fundamental role of institution for economic growth. Marketplace of ideas is an important supplement to economic growth logical chain of (physical capital, human capital, technological progress, total factor productivity, political and economic system), and propose appropriate institution is negation of negation of the "Washington Consensus" and the "Beijing consensus".Appropriate institutions through active government intervention in the market mechanism on the basis of economic development and social transformation, have been better to have a positive impact derived scholars’attention, and the boundaries of government, government’s actions ("grabbing hand" or "helping hand") and its evolution (more "grabbing" or more "helping ") Existing research only based on macro framework of the Chinese-style separation of powers ("political centralization" and "fiscal decentralization"), and the microscopic single-peaked preferences of "political person" or "economic man", furthermore, the studies have implied endowment is homogeneity and inter-regional flows is complete, and also ignores the meso-level regional endowment heterogeneity and the evolution of local government’s behavioral choices, but this article examines both the regional level and micro preference of "political person" and " economic man" from the Chinese fiscal decentralization system, for the macro backdrop choose local government behavior, evolution and performance, there are some theoretical additions for the fiscal decentralization and local Government Competition theory.Empirical tests on the relationship between quality of governance and the development of inclusive governance, we use the panel threshold effect model for the first time to comprehensive and detailed examination existence, effective and conditions of "Leviathan hypothesis","Flypaper Effect" and " Wagner’s law" in China, as well as interact with the size of government influence on the development of inclusive, the theoretical threshold model found the size of government and fiscal decentralization, transfer payments and economic growth affect the development of inclusive interactive, and exhibits non-linear relationship of "N-type","inverted U" and "N-type", its should cause the central government and local government attention in the formulation and implementation of regional policies and strategies, should take full account of the combined effect of policy implementation rather than a single goal.Inclusive type of government behavior is different from "the Encompassing Government","the Neutral Government","the Production-oriented Government" and "the Development-oriented Government", and its governance model is also different from the market-style government(emphasis on market-oriented government administration), participatory government (advocate more government involvement), the elastic-government (the government needs more flexibility) and reconciliation system Government (proposed to reduce government internal rules),"the Inclusive Government" needs to simultaneously address two core issues of economic growth and the development of inclusive, specifically, it need adopt appropriate institutions, economic growth and social inclusion as the core content of the "Development triangle", inclusive type Government Options and governance model is "reverse" supplement of the theory of comparative advantage, which decided on comparative advantage and factor endowments government how to follow, and is a strong evidence of "semi-inclusive and semi-predatory" of Chinese system and government behavior, but also for China’s global significance roads may add new content.The innovations of this article are:(1) on the formation of political and economic system of a country study, unlike both endogenous research perspective (factor endowments, authoritarian political game, or the choice of Authority), but in an open international economic environment, we research international trade that exogenous shocks channel analyzes political and economic system evolution.(2) Existing studies emphasize the spillover effects of industrial agglomeration and industrial agglomeration of self-organization, emphasizing industrial upgrading and structural changes within the industry market mechanism, the government acts in the role of the process of industrial agglomeration and industrial related effects, but less attention to Secondary and tertiary industries’development affect on agricultural technology innovation capability. This paper studies the industry correlation effects on the impact of agricultural innovation capacity from Secondary and tertiary industries, agricultural modernization is related to food security, food safety issues and Modernization, this study provides the new industrial development ideas.(3)This article focuses on the social stratification and social mobility, which impact on economic growth, we combine to form a sound development of coupling mechanism from social stratification, which belong to the sociology and social mobility, which belong to economic development of inclusive economic growth. Not only for economic growth, social mobility is important, for the equally important role in the development of inclusive, flowing through education, labor flows, occupational mobility, gender mobility and income mobility, can reduce the "bad inequality" of "inequality of opportunity" and "static inequality", and gradually eliminate various exclusion(social exclusion, geographical exclusion and economic exclusion), inclusive growth can help to solve the economic and social transformation in a variety of problems.(4)This article combines "top-down" Poverty Alleviation Strategy (economic growth and income distribution) and "bottom-up" Poverty mitigation strategies(Viability and social mobility), it emphasize that poverty relief channels and proposed inclusive growth poverty reduction model from two perspectives of population characteristics and individual characteristics.