Local Administrative Monopoly In China From The Perspective Of Interests Relation

In this article, the author analyzes a serous problem on local administrative monopoly in China and applies some institution transition theories in new institution economics theory. I hold that local government is viewed as "an economic man" that refers to the beings with rationality to some extent; local government's attitude toward new institution relies on the cost and benefit comparison raised by the new institution. I have analyzed the interest requirements of local government and concluded that the problem of local administrative monopoly was caused by the unbalanced interest system among local governments as well as between the central government and local government since China launched the reform and opening-up policy. In this unbalanced interest requirement system, some local governments' reasonable interest requirements can't be met. By administrative monopoly, local governments are able to not only make up some costs, but also get some additional interests that will be impossible to gain in the new institutions system in accordance with the integrated mark system. Therefore, the local government lacks impulsion to push the anti local administrative monopoly movement forward. The only way to get this problem resolved is to rebalance the interests between the central government and local government as well as among the local governments in terms of the way of institutionalization.