Endogenous Growth In Western China Economic Mechanism

The study of the factors that influence the economic growth and development in less developed countries and regions and their implementation mechanisms are inseparable from development economics. Most areas in western China are typical less developed regions.The strategy of non-balanced development were implemented for about nearly two decades during China's reform and opening-up,which causes the consequence that can not be ignored. The consequence is that the economic development gap between East and West continues to widen. In order to change the situation, the government brought up the western development strategy, which is a new policy .It is a pity that the implementation of the development strategy for a decade did not achieve the desired effect. This phenomenon , along with other economic practice of a number of developing countries ,will be the evidence that neo-classical theory of economic growth can't explain the condition of economic growth in less developed countries .Endogenous growth theory makes it possible for people to recognize and consider the determinants of economic growth and the implementation mechanism and provides a new way of thinking.New classical economics, as an important branch of endogenous growth theory, which centres on the division of labor and specialization, reveales a general system in which to achieve economic growth in the framework of some government policies . This paper, on the basis of new classical economic theory , attempts to explore a endogenous growth path to achieve the economic development in a particular aera in a certain background of economic development. At the same time, it provides a theoretical basis for China's western region to break the traditional economic development model, and form a self-development capacity-driven mechanism for economic growth .Based on the above research purposes, the research work done in the article includes the following points. First of all, it probes into the division of labor, transaction efficiency and the internal evolution mechanisms in system , considering that an improvement in transaction efficiency is the inherent power of evolution of division of labor,while that the system which is born within a certain level of division of labor and specialization forms uncertainty to reduce transaction, improving the effective constraints of transaction efficiency . System of property rights becomes formal economic incentives from the economic system , while social structure identifies the informal economic incentives. Social structure is to evolution of division of labor what improvement in transactions efficiency to the structure of property rights. Second, it further reveals how the division of labour, endogenous comparative advantage and the system reciprocally develop and points out that evolution of division of labor and endogenous comparative advantage start from exogenous comparative advantage. Endogenous comparative advantage is a core element to achieve economic endogenous growth in a country or region . Technological progress arising from the division of labour and professional development are the fundamental forces to promote the dynamic evolution of of comparative advantage.However, the system is an influential factor in the process of forming the economy endogenous growth mechanism. This is because the system has the function of saving transaction costs . Third, it analyses the transformation from exogenous comparative advantage to Endogenous comparative advantage in a certain range and the way economy endogenous growth capacity forms further. The existing system in a certain area demonstrates duality in the course of the formation of endogenous comparative advantages and economic endogenous growth capacity , which affects the speed at which regional economy develop and efficiency , also reduces or eliminates the loss of the economic efficiency caused by the institutional arrangements.Besides, it is of great significance to regional economy , reduction of transaction costs, enhancement in sharing the economic benefits brought by the division of labor and continually building up capacity for self-development.In the above-mentioned theoretical framework, this paper analyses and diagnoses the state of the economic development of the western region . It comes to the conclusion that since the implementation of the stragety of the western development, input of a large quantity of elements such as capital , etc. and the intervention of external forces promote economic growth and developmentof the western region. It is the fundamental reason why the gap between east and west continues to widen that the capacity for self-development is weak. Because the evolution of comparative advantage from the existing conditions of the economic development in the western area makes foundation for the general formation of the capacity for self-development, the formation of economic endogenous growth mechanism will push economy in the western regions forward . To sum up, the main innovations in this article are:First, comb the theory of economic growth, further analyse endogenous process of influential factors on economic growth ,the theory of economic growth continually departuring from the practice of economic development growth , ,and point out the development and improvement of the endogenous growth theory provides theoretical support for explanation of the phenomenon of long-term economic growth at general level.Second, new classical theory of economic growth as the support, frame the mechanism that makes economic endogenous growth in developing countries and regions , extending the scope of the study of the endogenous growth theory. Put the system factors into economic analysis within the framework of endogenous growth mechanisms, stressing the impact of non-economic factors on economic growth and development. This enriches the New Classical growth theory and makes it more practically significant.Third, according to China's actual economic development,work out how to measure some core concepts such as the division level, transaction efficiency. The exploratory scientific research into the relationship between division of labor ,trade efficiency and economic growth is carried out.