A Research On Local Governmental Behavior In Institutional Change

The actual process of institutional change of China has been advancing with its own characteristics since China's reform and opening. During the period of this transition, local governments which have been authorized with more power have also been playing their unique roles. Our economy theorists have attached enough importance to these governmental behaviors. They proposed lots of sincere opinions and maxims form different view angles. However, the efforts of studying local governmental behaviors based on institutional economy theories can be scarcely seen in a few amount of literature. Therefore, the author thinks it necessary to conduct a systematic research in this field. We keep working towards it hoping to make a thorough analyze on our local governmental behavior from a new angle.The institutional changes of China are vast and complicated. When analyzing this article, we combined local governments with enterprises and local residents-they are also microeconomics identities. The reason why we selected these two objects is that they are the micro-foundation in constructing our socialist market economy system. In this article, the author views the remolding of the two micro-economic identities of our country (enterprises and local residents) as a transitional process of our institutional system. Furthermore, we also focus on how local governments behave in the remodeling of the above-mentioned two microeconomic identities when they are confined to some hypothesized conditions and other conditions as economic identities. We analyzed the roles of local governments in institution innovation. Lastly, we attempt to setup a framework on analyzing the reciprocal relationship between Local governments-Enterprises-Residents in the course of institutional change.