Local Governments, Institutional Changes And The Development Of Private Economy

This thesis follows the line of institutional arrangement and changes which protect property and loosen political constraints, and concentrates its research on the inherent relations between the local governments under fiscal federalism and the spontaneous private enterprises, in the process of institutional changes and development of private economy. It also scrutinizes the causalities behind the gap between developments of private economy in different areas, aiming at providing a better understanding of the historical process of private economy development in different areas in the background of China's economic transition.To begin with, this thesis takes the perspective of endogenous institutional changes and economic development, accords the inherent theoretical logic on the issue, creditable commitment, and involves all the dimensions in the institutional analysis of this issue. It makes comments on the recent achievements in Historical and Comparative Institutional Analysis (HCIA), and illustrates the inherent theoretical logic linking history, institution as well as its changes, and economic development. On the basis of this logic, this thesis innovatively introduces the views and instruments of HCIA in exploring the effects of institution and its changes on the development of private economy, and this introduction makes explicit the basic theoretical logic of this thesis pointing at the problem.With regard to the political constraints of traditional ideology on the development of private economy, this thesis reestablishes a basic theoretical model of co-development of local government and private enterprises, based on the theory of fiscal federalism and involving historical conditions, political constraints and enterprise behaviors. The analysis indicates that the endogenous institutional changes through the cooperative equilibrium between local government and private enterprises, which loosens political constraints and promotes property protection, can only be achieved under the condition that the latter pose effective motivation on the former under some constraints. Further theoretical analysis indicates that whether the endogenous institutional changes can be realized is the critical factor in the formation of the gap between private economies in different areas. In other words, by establishing a model involving political constraints and enterprise behavior, this thesis provides a new theoretical perspective and a better explanation on the source of motivation of local...