Guanzhong - Tianshui Economic Zone, The Local Government Cooperation Mechanism Study

(the GTEZ for short)was promulgated by the State Council,June,25th,2009.the Plan has a target to build the GTEZ into a National Inland Economic Development and Strategic Highland in about 10 years, the GTEZ contains 8 cities, they are in different administrative regions and different administrative levels. It has theoretical and practical significance to know how to cooperate effectively with other local governments in the GTEZ. This paper focuses on the local government cooperation mechanism and the mechanism design on promoting cooperation in the GTEZ.Based on literature research, the paper uses the methods named the Location Quotient from Urban Geography and the Game Theory to research on the cooperation between cities in the GTEZ.At first, the paper explains the background of the Plan, and discusses about the opportunity and challenge. Then, the paper introduces many related literatures and theories. Based on them, the paper grades the 8 cities by economic strength according to the national statistical data, at the same time, counts out the comparative advantages according to the Industrial Location Quotient. Further more, the paper analysises the motive power of the cooperation between local governments, and points out the dilemma of voluntary cooperation. In the end, the paper constructs the cooperation mechanism in four parts, which are Communication Mechanism, Interest Distribution (Compensation) Mechanism, Evaluation Mechanism, and Dispute Processing Mechanism. The main conclusion goes as follows:1. The 8 cities have strong complementary in resources which could be the premise and motive power of cooperation.2. Because of the competition in political achievement, local governments cannot be forced to cooperate only by executive orders and economic interests. To break the dilemma, institutionalized cooperation must be considered.3. To achieve effective cooperation between 8 cities in the GTEZ, the cooperation mechanism should be constructed in four parts, which are Communication Mechanism, Interest Distribution (Compensation) Mechanism, Evaluation Mechanism, and Dispute Processing Mechanism.