On The Passive Competition Of Local Governments And Its Governance

During the social transformation period, the local government is a contradiction entity of economic rationality and public rationality and its interests are relatively independent. In order to attract the production factors to flow into one's own area, local governments have to compete each other. Because of the faultiness in economic and political system in our country and the lack of corresponding laws and system norms, the local government's economic rationality inclines to pursue its economic benefits and political interests to maximize one-sidedly. This causes the disappearance of public rationality and the appearance of some passive competition behaviors such as repeated constructions, local protectionism, and abuse of preferential policy etc.. These behaviors cause malignant and unordered competition among local governments, which is unfavorable to growing up a healthy and sound of nationwide market economy. Therefore, it is urgently necessary to control these behaviors. It is suggested to regulate the passivism competition behaviors among local governments by rules and systems, to adjust impetus of central authorities and local government respectively, and to introduce the third party --social forces to create the system environment which is favorable to sustainable development of local governments.