Research On Contingent Renewed Intergovernmental Game

In China, reform and development mostly be dominated by government, at the same time, many puzzle of the economic process be related to government action. On condition that official is nominated, superior and junior government is contingent renewed. Subject to the rule, local government must first meet the need of superior government and then maximize their utility. Hence superior government offer junior government an optimization bid to maximize the overall social profit. Several local government attach to a same superior compete each other for the official promotion. The effect of competition has direct relation with the future of the local official. The result of the game will impact deeply on the china economy.The paper pays more attention to a few problems:(1) what type is government structure in China? (2) how to shape between superior and junior government and same level government? (3) the rule of game between superior and junior government and same lever government? (4) the strategy and action in game every level government? (5)the result to China economy by the game between government? ultimate reason induced by the result? the direction to solve the problem in economic development recently?The paper takes the way involved theory with demonstration to answer the above problem. In theoretical research way, the paper found game model between the every level government; and in demonstration way takes case analysis of China economic practice to validate the conclusion of the game model.The paper conclude through the research:(1) "Development of heavy industry priority" strategy led to the production of the planned economy.(2) The fundamental disadvantage of the planned economy is information cost so much.(3) China redefined property rights by the contract system, and build a foundation from planned to market economy. Contract not only promotes the competitiveness among enterprises but also increase the incentive to governmental. (4) The paper found game model based on contingent renewed strategy between government, and first proposed and proved the economic principle of Chinese Communist Party the selection and appointment of official" integrity priority, and both integrity and ability’".(5) The game between governments led to imbalances in China’s economic structure and local government debt crisis. The main reason is the high administrative costs, wealthy country and poor people and the excessive concentration of government power.(6)The paper give a solution to the problem is:First, found limited government. Specifically include statutory tax, democratic budget, optimize people structure of the Standing Committee, separation of party and government, the full-time NPC, and improve the supervision mechanism by people. Second, establish the rule of law. That is to say from the traditional "personal transaction" into modern "impersonal transaction." Third, distract state-owned wealth to the people. By the stock market to a state-owned enterprise shares to the public, the funds be divided into three parts: one use to pay the interest of short-term loans of local governments, another part provide the social security fund, the remaining part allocate bank account of whole citizens.