Institutional Innovation As The Forerunner Of Rich Urban And Rural Development

Developing the countryside and the city together is of much importance and of difficulty to realize scientific development policy and to consititute hamonic society. Intergration of the countryside and the city is an important reform of economic and societyfic development in our country, This essay utilizes theory of instutional economics to analyze intergration of the countryside and the city, argues that in essence intergration of the countryside and the city is an instutional innovation. Futhermore, this essay develop a model explaining driving force of the instutional innovation and put forward mode of"Three-Win"or"Four -Win". The case that had happned in Chengdu City proves the model.1. Intergration of the countryside and the city is historical product when the economy in our country advances to a certain stage.and is the internal requirment of equillium development. Intergration of the countryside and the city oncerns adjustments of rural economic pruduction relationship and reform of production force and involves interests of the city and the country, at the same time it must be done under market onditions, so intergration of the countryside and the city is a complex instutional innovation and evolution.2. Instutional economics holds that instution being innovated stems from potential profit from scale effect and technical evolution, which can't br realized under the old instution. Someone's exploring the profit leads to Instutional innovation.As an instutional innovation, intergration of the countryside and the city took place as result of optimal allocation of resource and scale effect. Through the innovation optimal allocation of land, labour and other resources are realized and a Four-Win by peasant, enterprise, local government and the country is realized3.Chengdu's sucessful experence demonstrates as followings: (1)local government's active role; (2)suitale policy combing the advantages; (3)fully utilizing marketable ways. Chengdu's sucesses shows that (1)the inernal force of intergration of the countryside and the city comes from the innovation liberates rural production force. Chengdu's sucesses is consistent with Instutional economics; (2)the loacl government plays an active role in the process,which confront to forced changing pricinples; (3) intergration of the countryside and the city is not latral advantage transition but co-win, which comes from profit released by instutuional innovation.