A General Study On Local Public Investment

Based on the definitions of local public investment, and the view of the theories correlated with local public investment, this paper analysed that the scale, structure, fluctuation and economic growth effect of local public investment in China with positive and normative method in view of macroeconomics. Besides of this, the paper also studied some problems about the location choice of local public investment, regional productivity layout, and local public enterprises reform in view of microeconomics. Through analyzing the games between the central government and local governments under the decentralized finance system and the public investment policies in the development of western China, this paper put forward the improvement direction of public investment policies. In the author view, the increasing expansion of local public investment due to an incentive inherently. The structural adjustment of local public investment should take regional public demand as the direction, and subject to the transition of local government function. The paper thought that Local public investment has economic growth effect and welfare effect because public investment can foster economic growth and improve regional public welfare, and public strength & expansion of local public investment are the important factors influencing regional economic development. The main objectives of local public investment are to provide local public goods efficiently, to steer private enterprises' investment, to optimize regional productivity layout, and to provide the public service, infrastructure, and institution sustain in order to foster regional development. General speaking, the adjustment and optimization of property rights relation between public enterprises and local government is the key of local public enterprises reform because sometimes the objectives of public enterprise and local government aren't completely consistent. Nowadays, with the adjustment of relation of duty, right and utility between the central government and local governments, and the transition of government functions, the investment of local governments will become more public and more rational. At last, the paper thought that regional public investment policy formulated by the central government has decisive influence on economic development of low developed area, and the public investment policy made by local governments is important means to foster regional economic development. As a result, they are the important aspects that expanding the scale of the central governmental investment and coordinating the public investment policies of local governments between different regions in making and implementing the strategy of developing western areas in China.