Research On Local Protectionism From The Perspective Of The The Central And Local Interests Of The Game

In recent years, with the implementation and deepening of administrativedecentralization and reform of the tax system, there is a great change in the pattern of thecentral and local relations, and the power of the local government get expanded constantly, solocal protectionism appeared and aggravated. Because there is a great harm about localprotectionism, it has been highly concerned by the theory circle and practice circle. Throughthe analysis of theory and research status about local protectionism, we have found that localprotectionism is rising and development lies in the interests imbalance of central governmentand local government. So this paper based on the game theory and the theory aboutrelationship between the central and local government, combined with the specific features oflocal protectionism in China, analyses the harm effect that caused by local protectionism onChina’s politics and economy. The author from the perspective of game analysis of the centraland local interests of the game explained why local government take against rather thancooperation. Firstly, the information asymmetry in the game between central government andlocal government, make the local government take the adverse selection and moral risk ofopportunistic behavior to maximize their own interests; Secondly, the conflict betweenindividual rationality and collective rationality of the game between central government andlocal government. So, when the local government faces the choice of national interests orlocal interests it will abandon the collective rationality or national interests and the chooseindividual rationality or local interests; Thirdly, lack of system constraints game betweencentral government and local government, led directly to the local government against thegame regulation, take uncooperative behavior in order to pursuit their own interests. Localprotectionism not only restricts the equalization of basic public services, but also hinders thebuilding of competitive and a unified national economic market. Therefore, it is high time forus to solve the problem of local protectionism.To solve the problem we should make effortsfrom many aspects: Firstly, standardize the local government act of self coordination.Secondly, building the unified and open, competitive and orderly market economy system.Thirdly, make the balance of central government and local government interests. Fourthly,make the game mechanism of the central and local perfect. Fifthly, establish the relationshipbetween the central and local interests law as soon as possible. Lastly, improve the localgovernment officials performance assessment system.