Research On The Institutional Innovation Of Local Government In China

China has made considerable achievements and progress in the past over thirty years on reform and opening up. The root of these can be concluded as having opened up the socialist road with Chinese characteristics, formed the system of socialist theory with Chinese characteristics, stuck to the development of the socialist system with Chinese characteristics. So to speak, the essence of the incremental reform of China in the past over 30 years is a process of system changing and institutional innovation. In the process of reform, a series of old systems has died and a series of new systems has grown out. The main bodies of institutional innovation include governments, groups and individuals, among which the governments are the greatest suppliers and stay in the core position. Under the stimulus of non-equilibrium reform strategy and the political tournament which are dominated by the central government, the local governments are pursuing the potential system benefits with a strong sense of institutional innovation competition. But the reform in many aspects has been described as crossing a river by feeling the stones, the rights and boundaries among the central, the local governments and enterprises are unclear, so the phenomenon of power derangements and expansion among local governments have widely shown up. The central government failed to fulfill its functions in regulation, correction and discipline, so that many severe phenomenon have widely spread, such as the mutual comparison, blind expansion, project set-up and carry-on, high input, low output, the gap between the rich and poor, environmental pollution, redundant construction, local protection, mass incidents, corruption, social contradictions, and so on. The urgency of social and political system reform is growing rapidly.On the basis of summarizing the lessons of reform and opening up and the development law of politics and society, "The Decision made by the Central Committee of the Communist Party of China on certain major issues of comprehensively deepen reform " has been passed on the Third Plenary Session of the Eighteenth Central Committee. It has pointed out that the overall goal of comprehensively deepen reform is to improve and develop the socialist system with Chinese characteristics, promote the modernization of national management system and ability. To promote the modernization of national governance system in the new historical period is to build up the system and mechanism of inspiring social vitality, expand democracy and guarantee fairness and justice. In terms of local government, to accelerate the modernization of the management system and ability, it has to emancipate mind furthermore, change ideas, set up public views of authority and laws along with the stable service consciousness. Other than that, it has to correctly handle the relationship between the government, markets and the society and to innovative the management methods. Combined with the current that the economy of our country is turning to a new normal, the following factors are crucial for China as to bid farewell to the traditional unbalanced, uncoordinated and unsustainable development model and take a smooth transition to the new normal:how to play a better role in the new stage of reform, correctly grasp the new trends, new features and new energy, to promote the appropriate development of regional economic growth, structure optimization and social harmony model.Based on such background, this paper adopts the method of combining theoretical analysis and empirical analysis through some relevant theories, such as institutional economy, new public management, governance modern management skills, entrusted agency and the transformation of local government functions to explore the institutional innovation of local governments, study the historical evolution characteristics of the institutional innovation, analyze the performance of system innovation of the local governments and their problems and causes. This paper draws lessons from the local government reform and development of the United States and France in recent four decades. Combined with the new situation, tasks and laws that the local governments are facing since China’s entry into the new normal, this paper provides the policy and theory reference for the continuing deepen reform and the promotion of steady, sustainable and healthy development for local governments.This article writes into seven chapters. The following contents are included:Chapter 1 Introduction. It mainly introduces the background and meaning of the study on the institutional innovation of Chinese local government, logical thinking and research method and it explains the innovations and shortage of this research as well.Chapter 2 Literature Review. It briefly generalizes and analyzes the literature of institutional innovation and local government on abroad and domestic.Chapter 3 The relevant theories of institutional innovation of local governments. First it gives analysis on the theoretical foundation of the innovation of local governments, combined with modernization of governance theory, principal-agent theory, the theory of functional change of local governments. Then it puts forward the performance analysis model of system innovation of Chinese local governments and introduces the economic development of simultaneous equation analysis model of institutional innovation and environmental constraints.Chapter 4 The historical evolution and characteristics of the Chinese local governments institutional change. First it analyzes the local governments’ institutional change and its characteristic since China’s reform and opening up. Then it analyzes the growth and the characteristics of local governments institutional change of the pearl river delta, Yangtze river delta, and Beijing-Tianjin-Hebei since the reform and opening up. Thirdly it analyzes the relevance between the types, the quantity and regional economic growth of local governments system innovation. Finally, using the simultaneous analysis model of economic development, it gives the empirical analysis of China’s institutional innovation of local government at the provincial level economic performance.Chapter 5 Problems in Chinese local governments institution innovation. On the basis of historical evolution analysis and empirical analysis in chapter four, then it further gives the analysis of the Chinese local government system innovation incentive constraints, and its resulting problems, including lack of enough systems, fairness and prospect. It also provides analysis of the causes, through insufficient supply from the central government’s system, the profit-driven of local government, the inadequate functional change of local governments and the embedded lag of informal institution.Chapter 6 Comparison and Reference from the Institutional innovation among Local Governments between the Developed Countries. First of all, according to the analysis of the causes and problems mentioned above, it introduces the reform and development of American local government which is on behalf of the federal system in the recent 40 years. Secondly, it analyzes the reform and development of French local government which is on behalf of the unitary state in the recent 40 years and the reform and development of Germany local government in the recent thirty years. Finally it analyzes enlightenment we have got from the institutional innovation experience of the local governments in America and France under the new normal.Chapter 7 Suggestions and strategies on institutional innovation of Chinese local government. According to the analysis of the problems and causes of the institutional innovation by the Chinese local governments mentioned in Chapter 5, combined with the analysis of the institution innovation experience of the developed countries local government mentioned in Chapter 6, it puts forward some countermeasures and suggestions of Chinese local governments under the new normal.