The Study On The Interests’ Interaction Between Development And Management Of Rural Areas

This paper has based on such game models as Static Game, Dynamic Game, Evolution Game and Principal-agent Theory to probe into the relationship of interests between villagers and village leaders and among the leadership. It has systematically analyzed the balance of interests between and among village officials, villagers, local government leaders, project development organizations and project appraisal institutions during the application, implementation and evaluation of rural development projects. The main achievements of the research in this article are as follows.Candidates for village officials provide or promise to provide material benefits to win more votes from villagers. In this exchange of interests, the candidates pursue the ultimate goal to be elected as village officials while the villagers aim to or at least expect to have more material gains. Candidates would always find themselves in a zero-sum game with irreconcilable conflicts of interests. Village officials represent both the villagers and the local government. They earn benefits from accomplishing the affairs entrusted by both sides. It’s true that the two parties (villagers and village officials) would both seek the maximization of their own interests. But village officials have the upper hand due to their powers over villagers. They possess more collective resources and gains over villagers and could even obtain grey income. Villagers, on the other hand, would suffer from loss of interests though they are expected to protect it through the villagers’meeting. Interplay would be undergoing for the fight over the actual control of the village and the distribution of collective resources among village officials, especially between the CPC secretary of the village and villagers’committee director.It has become a strategic choice for local governments and village officials to implement rural development projects since the abolishment of agricultural taxes. It is in the best interests of both local governments and villagers to help each other in the application for projects. And a win-win situation can only be reached when local governments support the implementation of projects for development organizations and development organizations would also benefit from project resources. At the same time, to win over the limited number of projects, the interaction among various villages will influence the feedback from development organizations on applicants as well as the benefits from the project applications. A good interaction among different villages over the application of projects would also bring in positive appraisal and feedback from the approving authority and hence, good results from their projects. And at last, the interaction between the approving authority and the applicants would also influence their respective benefits.During the implementation of the projects, and in the case of information symmetry, the clients of project quality supervision could maximize the interests of themselves and the project agents by linking project results with the agents’incomes. And in the case of information asymmetry, incentive measures could be introduced to encourage the agents to perform better and ensure the best interests of clients and villagers. As for the interplay between the clients from the development organizations and those agents, general inspection and focused inspection should both be undertaken to avoid malpractice and ensure quality of the project. What’s more, if necessary, severe punishment would be imposed on the agents for their poor supervision.During the appraisal of projects, the amount of the payment by the project development organizations to the appraisal agencies would also influence their strategic choice of project quality supervisors and hence the decisions and revenues of the project development organizations. The pursuit of the maximization of short-term interests of various parities at the expense of the interests of the clients from the development organizations would also lead to the villagers’ loss of interests in the long run.