Research On The Power Of Economic Intervention Of Local Government In The View Of The Law And Economics

Acting as the main subjects of economic law regulation, the local governments have the functions to compensate for the insensitivity in the central regulations of the market competition. And the local governments have the irreplaceable position in maintaining the order of market competition and the realization of social the overall economic benefit, however, the economic intervention of the local governments have been taking some negative influences when it play the positive role at the same time.it is common that the government sacrifice the social public interests or inappropriate intervention in the market competition, only for the maximization of their department interests, all of these have become obstacles in the realizations of the economic law’s functions, to regulate the local governments’power become necessary and an important topic of perfecting the economic law legal system.The first part of this paper is the basic theory about the power of economic intervention of the local governments, this paper expounds the contents and the functions of the power of the local governments in the background of economic law, sets forth related economic basis to regulate it, and the feasibility to apply the method of economics to analyse the behaviour of the local governments. The local government intervention in the economy operation can solve the problems of restricting competition and failure to provide public products which can not be sloven by the market itself, while because the power is enforceable and monopoly, if there are not related regulations to be effective legal restraint, there may be more damage when the power intervenes in the economy than it does not, therefore, relevant laws should be imposed on the local governments when they exercise the economic intervention, only when governments intervene and are constrained at the same time, the exercise of power can play their due functions.The second part is the analysis about exercising economic power of local governments abroad in the view of law and economics. The United States and Japan respectively as the typical representatives of a common law and civil law, are engaged in changing the way that the local governments performs in the power of economic intervention to deal with possible crisis, while, because of the integrity of the interests between the local governments and market subjects, the social interests give way to the private interests inevitably as the result of the exercising power, which leads to the goal of economic intervention failed. Driven by the limitations of rationality, the behaviour of the domestic and foreign local governments exist the same points, through the analysis about the power behaviour of the local governments abroad in the way of law and economics, we can find the natural reasons which conduct their behaviour, it is meaningful for our country to improve the relevant system to prevent the occurrence of similar phenomena.The third part is the focus of this article, through the economic analysis of the local governments’behavior, we can find out the radical reasons which conduct their action. Local government may take the acts of adverse selecting, the shortage of innovation incentives on the economic policies and local protectionism, etc., and all these acts are the results of what local government decided to do after considering many factors, it misleads the local governments that the central regards economic development index as the main measure of performance evaluation standard, limited term of office leading to the speculation in a short time, the vicious competition among different local governments.Just as mentioned above,The fourth part proposes some advices to perfect the related system in our country, including the legitimation of citizens’ migration,diversification of political achievements appraisal standards, the authorities of the economic system and the security of transfer payments, to ensure that under the control system, the local governments’act can promote the realization of the economic law’s functions.