From Excessive Competition To Standardize Management: Development Zone Management System Pressure To Innovate And A Way Out

Mandatory institutional change, as a matter of fact, is policy supply when a country is seeking maximum power-rent and maximum output. Being the main body in performing institutional change, government can drive the move in the shortest time and at fastest speed, and reduce its cost by taking advantages of mandatory force. However, it also has unavoidable drawbacks as having powerful destructive force, high risk and "free ride" behavior. Economic and technological development zones are outcome of mandatory institutional change driven by the central government. In social transformation period, development zones serve as trial bases for market economy and administrative innovation, and enjoy favorable policies and special management mechanism. They boast incomparable privilege in accumulating resources and productive elements such as capital, technology, talent and etc. Thus these years witness phenomenal development of development zones.With pursuit of maximum interest and stimulation by successful development zones, local governments have been competing with each other for setting up development zones. This has led to excessive competition in the 21 century, featuring that local government sacrifice financial revenue and farmers' interests for capital influx into their development zones. Though the central government has made great achievement in governance of development zones, it seems that development zones can not work as a long-term mechanism. Thus, an urgent problem needs to be addressed as to how to promote sustainable, healthy and fast growth of development zones through institutional innovation, and make them take a leading and radiating role in local economic growth.By taking Wenzhou economic and technological development zone as an example, the essay gives an insight into excessive competition and its system basis as well as power gaming between central government and local government. It also analyzes potential possibilities for a transit to standardized administration through institutional innovation. To end the essay, the author puts forward two viewpoints. Firstly, the problems existent in the growth of development zones, especially those related to management mechanism and operation modes, mostly derive from mandatory institutional change itself. Government-driven institutional change is born with deficits and limits. Secondly, as long as current policy change can't effectively solve above problems, development zones will seek to promote its growth through its own innovation. But they have certain limits in this aspect, even if local government plays a positive role in the move.