Study Of The Role Of Government In Local Economic Development

Though manufacturers and residents may be affected by the development of regional economy, they are only'no intention'facilitators of regional economy. The true'intention'facilitator in promoting regional economic development is the local government, which plays a key role. During the past three decades, the role of local government in promoting economy is important in China's rapid economic growth, especially in western China. Based on this phenomenon, this paper tries to approach the deep reason of promoting economic development by local government, and make in-depth analysis on the role of local government in economic development.First of all, based on the analysis of the vertical chain which connects central government - local government - microeconomic main body, the paper indicates the relationship between local government and others, and the benefits from each main body's requirement for economic development. Then it reveals the power source to promote economic development by local government.Second, the paper has summarized the economic behaviors of local government. From the perspective of product market and factor market, it has made a summary and analysis on the economic development behaviors of local government. Then, based on the generalization and analysis above, the research has focused on three key points: one is the government role in direct capital-attracting, one is the government role labor-attracting at factor market, and another is the government role in SME support at product market.Through the research on direct investment, we get conclusions that the key factor of capital-attracting in Yunnan Province is the level of infrastructures, including both tourism resources, richness and development of mineral resources, transportation and communications. By the study of government role in labor-attracting, it demonstrates that living environment of social community has the biggest impact on labor flows, while income also has a great effect. Through investigation and research on government role in SME supports , it finds out that from situation of Kunming and Yiliang areas, the financial supports and market development on SME need more government supports.On the basis of theory and data analysis, the author has conducted field research in five counties such as Gengma, Mile, Yiliang, Jiangchuan and Lincang, and has generalized some measures and ideas of local government roles to promote economic development, from the perspectives of the capital-attracting, labor-attracting, and SME supports.