Study On The Income Gap Between Urban And Rural Areas With The Background Of Government Led Urbanization

Our country began to develop small and medium cities in the mainland and limited the major cities from planned economy period, till the reform of market in 1978, "many cities miraculously rose above ", and then to the economy under the new normal situation, "the urbanization is highly relevant to state’s policy in rise of China."(Li Keqiang, 2012),. At the same time, with the planned distribution model is substituted with market-oriented distribution one, floating population accelerated the rate of the urbanization, and China’s income distribution and urbanization trend also changed dramatically, the capital stock and per capital income growth and Income disparity expansion existed at the same time.. And the income gap between urban and rural residents has been hovering at a high level.The income gap between urban and rural areas is the most important factor to affect the income gap between the residents of the country, narrowing the former is of great significance to reduce the latter, under the background of huge income gap between urban and rural areas in our country, This thesis studies the change mechanism of the income gap between urban and rural areas under the background of the leading role of government, as well as reveals the inherent relation between China’s income gap between urban and rural areas and government behaviors.City, the place of population concentration, and market, the channel of realization of income distribution. The word "city" itself shows the inherent mechanism of the interaction between urbanization and income distribution:the prosperity of the city comes from the increase of income, and in return, the increase of income expands the scale of the city, through combing the domestic and international related literature on urbanization and income gap between urban and rural areas, the thesis constructs the analysis framework of urban-rural income gap under the urbanization of the leading role of government, and concludes that the income gap between urban and rural areas is both endogenous and exogenous, while the endogenous income gap between urban and rural areas is spontaneous, its evolution is affected by market forces, the exogenous income gap between urban and rural areas is mainly affected by government’s financial revenue and expenditure, the government has formulated the economic development strategy, the impact of relevant institutional arrangements. These factors have a direct impact on the income gap between urban and rural areas, but also indirectly influence the evolution mechanism of the income gap between urban and rural areas. The change trend of the urban-rural income gap under the background of the leading role of government is the result of both the endogenous and exogenous factors.In the process of urbanization in China, dual economic structure is obvious, and the marginal productivity of urban and rural areas is very different, which is the reason why China’s urban-rural gap appears. The governance model of "political centralization and economic decentralization" enables our government to have more economic control ability than many other governments in the world, in the urbanization process, our government follows planned economy thinking, exercises administrative power to interfere in it. On the issue of the relationship between urban and rural interests, our country’s urban bias is very serious, which has caused the gap of urban and rural income in China to be exogenous.Empirical studies show that negative effects of government revenue on the income gap between urban and rural areas is greater than the positive impact of government spending, that is, the government is reluctant to provide public goods, which means that China needs to further rationalize the relationship between government and market, including further study of land management system reform and the improvement of the administrative efficiency of the governments and so on.We also sum up some cases of the success and failure of the urban and rural income gap between the developed countries and the developing countries in the process of urbanization. City in any historical period is a symbol of prosperity and civilization, building prosperous and civilized cities is necessary for the rise of great powers. while some countries in the process of urbanization successfully controlled the expansion of the income gap, thus realize the balanced development of urban and rural areas; other countries witnessed some severely unequal phenomena such as "slums" and "Latin American Traps", hindering the sustainable economic development. By comparing these different models, we can draw lessons from them.The basic conclusions of the thesis are as follows:one, the Chinese government leading type of urbanization is a kind of exogenous development model of urbanization, the changes of the income gap between urban and rural areas of our country is the result of market forces and government intervention in the dual factors, both endogenous, exogenous. Government leading type mode of urbanization and government behavior on the income gap between urban and rural areas not only have a direct impact, through the relevant system arrangement disturbing the market forces indirectly, on the income gap between urban and rural areas, the income gap between urban and rural areas in China is difficult to converge. Second, fiscal decentralization and local government behavior alienation result in short-term behavior of local governments, leading to urban construction prior to the market building and land urbanization faster than population urbanization and capital stronger than labor, not conducive to improving the employment and income of the farmers. Third, the land system and the household registration system are currently impeding the free movement of factors of production,the biggest institutional barriers, we must further rationalize the relationship between government and market, promote the free flow of elements of the market, further deepening of the household registration system and land system of market reform, reducing the interference of administrative power of the market mechanism, this will be help to urbanization in the process of narrowing of urban-rural income gap, achieving the balance of. our country’s economy in the process of agglomeration...