Balanced Growth Mechanism Of Supply Of Public Goods Perspective Of The Chinese Regional Economic Study

Based on the fact that the unbalanced growth of regional economy is determined by difference of productive efficiency of productive elements, the impacts of public goods supply on balanced growth of regional economy are studied, and some suggestions and methods about financial institutions are proposed in this paper. In the research, the theoretical analysis is based on the model of output of regional economy, and the experienced analysis is based on the panel data of cities in China.This paper consists of four parts which are the theoretical basis (Chapter one and Chapter two),the analysis of situation(Chapter three,Chapter four and Chapter five),the innovations of institution(Chapter six,Chapter seven and Chapter eight) and the conclusions(Chapter nine).In chapter one the background, the significance and the structure of the research are introduced and some specialized conceptions are explained.In chapter two the theories of regional economic convergence and divergence and the studies in how to realize balanced regional economic growth from the view of market mechanism, the view of productive elements, and the view of behavior of government are introduced.In chapter three it is discussed that disvergence of regional economy is the result of difference of productive efficiency of productive elementsis affected by public goods supply. Difference of productive efficiency of productive elements depends on optimal decisions of firms and households.In chapter four the mechanism that public goods supply affects regional economic growth is analysed.It is discussed that the impact on land price of public goods restrains economic growth on which public goods supply has the positive impact.The process of economic agglomeration and economic radiation are explained from the view of public goods supply. The positive externality of public goods affecting the optimal decisions of firms and households affects the flow of productive elements, so economic agglomeration is caused by accumulation of productive elements appears in those districts with higer lever of public goods supply. Because utility of public goods is constrained by regional space, land price solves the problem of overuse of public goods.Near cities benefits from their adjacent location and the overflowed impacts of pubic goods utility of central cities. Therefore, the phenomenon of economic radiation appears.In chapter five the endogenousity of public goods supply level and its impact on regional competition in public goods are studied. Public goods supply is determined by the financal ability of local governments on which the development of regional economy has the positive impact, so public goods supply is endogenous.Developed districts have advantages in the regional competition in public goods and it will enlarge the economic gap between developed districts and developing districts.In chapter six the methods to reduce endogeneousity of public goods supply and the financial institutions which are designed to realize equality of ability of public goods supply are studied. Governmental financial transfer institution for compensation is the enlargement of that for aid. From the compensations for taxation institution, price system and environment, it will alleviate the situation of unbalanced governmental financial ability.Bonds of local government based on capital public goods supply will give local governments enough powers to improve its public goods supply in their own initiative necessity. The governments should control the magnitude and speed of change in land price in order to avoid its negative impact on economic growth, and the central government also should redistribution the income from land trades for equity.In chapter seven the standard and mechanism of choice in public goods for balanced regional economic growth is studied. It is a wise decision to rely on the double principles which consist of the principle of efficiency in justice and the principle of justice in efficiency. For the efficiency of government affects public goods supply, the propotion of financial expenditure should be decided properly among governmental investment and governmental consumption. It is necessary to strengthen democratic institution of choice which can be connected with financial budget of local governments.In chapter eight two examples are analysed to study how public goods supply promotes balanced regional economic growth according to economic radiation strategy.It is the traditional route for economic development in economic area to receive economic radition. The experience of Suzhou shows that industry in adjacent cities should be connected with that in central cities and some sorts of public goods supply, such as infrastructures for communication and industry, are prioritized. It is the occasional routine to enlarge economy of central cities for economic growth in economic area. The experience of Chongqing shows that economic growth of central cities will benefit public goods supply, such as infrastructures for communication and industry during the development of industry.In chapter nine the conclusions are provided and other deeper studyies in the future are anticipated.