The Economic Analysis Of Reconstruction Of Urban Village

Urban village is a special phenomenon during the fast urbanization in our country. As the quick development of the city, the problems of urban village are becoming more and more serious, such as chaotic layout of the buildings, bad sanitation conditions, deficiency of infrastructure facilities, complicated social securities and so on. Therefore, how to reconstruct the urban village has become the same problem of government, citizens and even villagers. And many scholars on sociology, geography, urban planning and economics begin to study the problem from the view of society, economics and institution.This paper studies the problem of reforming of urban village from economics, based on the example of Liede community which is the first village reconstructed in Guangzhou. Firstly, summarizes the negative and positive effects of urban village based on former studies and analyzes the necessity of it. It includes three kinds of difficulties in the practice of improving urban village:collection of fund for improvement, plans of removing and compensation and property of the land. Secondary, analyzes the relations of interests among the main bodies through stakeholder analysis, and finds out how to coordinate the interests from example. Applies game theory to build up model of two or three bodies, and concludes their results and preconditions by game equilibrium analysis. Thirdly, studies the phenomenon of market failure and government failure during reforming urban village by public economics, and analyzes the correction of failure and weakness in the example of Liede community. Finally, the paper gives some suggestions to the government for improving the urban village.