Research On Benefit Mechanism Of Local Government Co-opetition

Since the reforms in decentralization and marketization in 1980s, the Chinese government has divided its powers to the local divisions stage by stage and has enabled them more and more independent roles of regional interest entities. On dealing with certain issues, the rational actions of some local government may turn into the irrational ones in terms of macroeconomics. In order to develop its regional economy, the local power competes fiercely against its counterparts. Actually speaking, they pay high and gain much less than their maximal interests in the vicious competition. Meantime, this competition will be intensified further along with the elevation of the status of the regional economy during the processes of reform and opening, world science and technology innovation, and globalization. In particular, China's entry into WTO has placed the responsibilities on the local governments of not only developing themselves, but reinforcing the competitiveness of the state. It is known that the key point to advance the country's overall strength is to integrate its inside parts. Likewise, the essence of realizing the regional competitiveness is the regionally internal integration. Accordingly, it can regulate the competition among local governments with the guidance for them to forward towards co-opetition in accordance with their separate interests, which will boost the constant development of both regional and overall economy.The paper assumes that the local governmental relations are inevitable to trend toward co-opetition. It attempts to construct a model to construe the reasons of regionally governmental competitions from the angle of the interest relations. After the analysis of impact of interest changes of local governments on their co-opetitions, it proposes corresponding mechanisms to speed up the co-opetitions, i.e. interest regulation mechanism, interest partaking mechanism and interest competition mechanism.