A Study On The Impact Of China’s Property Rights Regional Institution To Economic Growth

Economic growth has been the core of macroeconomic research, which is notonly the starting point of economics theoretical research but also the endpoint.Theeconomic growth is not completely identical neither in differential regions during thesame period nor in the same region while in different historical conditions, theresearch of newly industrialized countries and regions is the highest priority.The sustainable and rapid economic growth, regional economic disequilibrium inChina, since the reform and open to the outside world, are not only promoted bytraditional carriages: resources, capital, technology and labor, but also occurring in thespecific institutional environment and structure. No matter what kind of growthcannot exist independently divorced from institution background. The institution runsthrough the entire process.With the deepening of reform and opening up, the role oflocal government in economic growth has being become more and more important,the original economic analysis paradigm of government behavior may ignore otherdecentralization and balancing outside of “separation of powers”, which has been notentirely suited to China’s problems.The article finds an ultimate way to analyze the growth from property right, itproposes that China’s regional system is characterized by property rights regionwhose behavior subject is local government. It is considerd that configuration offinancial authority and administrative power in government bureaucracy is the key, asknown as of financial income-expenditure relationship.The special political-economic environment and function division of china makethe property rights regional institution different from local system mode under thefederal countries. It gives the local government relatively independent and completelocal decision-making power, combines political incentives with economic incentives,which is the advantage of China’s administrative management system. This papersketches out the interest pattern relying on principal-agent theory. Furthermore, itdiscusses the dual property and functions of regions,“government-private","servicingpublic service-developing economy ". Inter-regional game is an inevitable and impliedresult of this institution, which also is the optimal choice. The institution is not perfect，its negative externality is due to absolute administrative distribution ofresources. In other words,“private” out of control causes “government failure”.A Theoretical model of China’s property rights regional institution and long-termeconomic growth is constructed by introducing some factors in two-sector model andfiscal expenditure decentralization mode. The long-term growth rate of output percapita is not only a function of proportional tax rate, but also the function of fiscalexpenditure structure, sector expenditure decentralization, fiscal decentralization,effective labor, depreciation rates, population growth rate and other factor.Based on the model mentioned above, this paper carries out research on theempirical and differential study of influencing mechanism.The Panel data analysisconsiders that the China’s property rights regional institution is an importantguarantee to realize overall best benefit; Differentiation of institution contributes tothe regional rapid economic growth. The cause of this phenomenon has beeninvestigated from three directions.Some suggestions are put forward to solve the problems existing in regionaldevelopment, such as the rising of fiscal expenditure scale, repeated construction andindustrial structure assimilation, local protection and market segmentation, as well asenvironmental problems. Defining the function range of government, and clarifyingthe scope of financial revenue and expenditure; repositioning the relationship betweengovernment and market, adjusting the structure of expenditures; constructing the"topdown" and "bottom up" incentive constraint mechanisms and other administrativerestriction mechanisms, as well as the coordination mechanisms of ecologicalcivilization in development of rengions and cities.The paper is organized as follow.The first two chapters lay a foundation for thesystematic research. Chapter III conducts a theoretical analysis on the impact ofChina’s property rights regional institution to economic growth. The empiricalresearch of influencing mechanism and differential research, as well as the negativeexternality analysis are mentioned in Chapter IV and V. The last part systematicallysummarizes the conclusion obtained and the major innovation of this dissertation.Meanwhile, it points out the existent insufficiency of the article and put forwarddevelopment trend.