Government Fragmentation, Metropolitan Governance And Economic Development

Economic growth and development is the eternal theme of economic research.Since the reform and opening up policy, China's economy has made remarkableachievements, which is called "China miracle" by the world. There are a large numberof theoretical and empirical literatures at home and abroad that have explored thefactors and its mechanism that affect economic growth. To explain "China miracle",many analytical paradigms emergence, including the local government competition,this has been regarded as one of the key factors that lead to the emergence of "Chinamiracle".To a certain extent, the competition among the local governments based on thepromotion tournament has indeed mobilized the enthusiasm of local government indeveloping economy. However, scholars have gradually paid attention to the negativeimpacts of excessive competition among the local governments. With the deepeningof economic globalization and regional economic integration, international economiccompetition is increasingly turning to the competition based on the metropolitan areas;metropolitan areas have become an important symbol of measuring a country'scompetitiveness."Only GDP era" is gradually becoming history. Cooperation andbuilding up a good governance mechanism among local governments are particularlyimportant to enhance the competitiveness of metropolitan areas. Cooperation,governance and even the good governance becomes the goals pursuit by all, and thefragmented local government system is increasingly difficult to adapt to the needs ofthe integrated development of the metropolitan areas. Thus, explore how theorganizational structure of governments in the metropolitan areas affects thecompetition and cooperation (governance) among the local governments and what isthe internal mechanism that affects the metropolitan areas' economic development hasbecome necessary.Based on the collective action logic of Olson, the author built an institutionalcollective action framework to study metropolitan area governance. The Chinese-styledecentralization leads to the fragmentation structure of local government inmetropolitan areas, and has triggered a governance crisis of the conflict betweenindividual rationality and collective rationality: the rationality of individualperspective leads to the irrational of collective perspective. Therefore, to explore thegovernance of the metropolitan areas must break the prisoner's dilemma. On the basisof institutional collective action framework, this paper constructed the HHI and MPDIindex to measure government fragmentation in the Metropolitan areas, then measuredthe degree of government fragmentation of Metropolitan area in Yangtze River Delta,Pearl River Delta, Beijing-Tianjin-Hebei preliminary, and empirically examined theeffects of governance structure and its change in "cost-benefit-efficiency", including administrative costs, economic growth, and economic performance. Thestudy found that:(1) there lies a significant positive correlation between thegovernment fragmentation of the metropolitan area and the administrative costs oflocal government according to the empirical research;(2), empirical research foundthere is a weak positive relationship between metropolitan government fragmentationand economic growth; and further (3) the administrative division adjustment ofturning county (city) into districts has significantly impacts on economic performance,and enhances economic performance.According to the empirical results, this paper further analyzed the similaritiesand differences of metropolitan governance between China and the United Statescomparatively. Through a comparative research, this paper considered that the sourceof the metropolitan area governance issues, and the issues itself that lead to thediscrepancy between the two countries' metropolitan governance model. Based on thelessons from the U.S. metropolitan areas governance, this paper proposed tostrengthen the role of the NGOs, enterprises and individuals in the governance ofmetropolitan areas in China finally, and pointed out that the evolution direction of thegovernance structure of China's metropolitan areas in the future is: officialadministrative division adjustment and informal regional coordination mechanism asthe main instruments for metropolitan governance, and a jumping institutional changeevolution path which should be gradually centralized.