Executive Powers And The Evolution Of Industrial Clusters

"All the economics are political economics", this is a profound metaphor in particular to China's market economy which is originated from a planned and collective economy. Mainstream economics, which is affected by the economic liberalism, seldom talk about the impact of the Executive Powers on the market economic process, even if the Keynesian theory, which is limited to the macro level, never discuss the direct influence of many conducts such as price control. Since the emergence of industrial clusters after China's reform and opening up are accompanied by a strong involvement of the Executive Powers, it is not comprehensive to discuss the evolution of industrial clusters without considering the Executive Powers.Chinese scholars of course have been aware of this problem. They have done many researches about the "Sunan model" and, more importantly, "Wenzhou model" from the angle of local government action and come to a lot of innovative theories. However, the conduct of local government represents only part of the Executive Powers, we are still lack of literatures which talk about the impact of Executive Powers on the evolution of industrial clusters and institutional changes. This paper attempts to do an institution experiment by selecting two textile clusters in Shengze and Wangjiangjing, which almost have the same location, culture, technology and market conditions, but belongs to different executive divisions. The development paths of this two clusters are very different, so this paper try to make an evolution model of industrial clusters under the participation of Executive Powers, and analyze the impact of the Executive Powers on the evolution of industrial clusters and changes of institution.The main contents and the framework of this paper are as follows: The first chapter describes the background, the significance of topics and the framework, also involves a literature review from the perspective of government action to talk about the evolution of industrial clusters and changes of institution. Chapter II discusses the different paths of the two textile clusters, in order to create a foundation for the analysis below. Chapter III analyzes the reason of the path differences, and interprets the important role of the Executive Powers in the evolution of the cluster, and puts this factor into the industrial cluster model. Chapter IV tries to reveal the real impact of Executive Powers on the industrial development through specific empirical materials. Chapter V is the conclusion of this article, and gives a proposal about the action of Executive Powers.