A Study On The Process Of Marketization Of China’s Local Government Behavior Choice Logic

Marketization is an important feature of the local government in China, playing major roles in both the local development and the economic development during the transition period in China. During the economic development, the public service supply from the local government is usually ignored, due to lacking the constraint of the local government behaviors from the system. Thus, local government obviously has the bias, when performing its government functions. Why does the local government neglect the function of public service, while actively performing the function of economic construction? What is the external power, prompting selectivity to perform the functions of local government? From the point of view of system, these behaviors of local government originate from the environment of the system. The key factor in influencing the behavior of local government during the transitional period is the lack of the institutional binding. During the process of marketization, the local government gets more interests with the development of economy. The local fiscal revenue increases, and the local governments get more right to speak in the game with the central government. Although the local government is only the agent of the central government authority, the central government is quite difficult to accurately control the local government due to the information asymmetry. Due to various reasons, the priority objective of the local government is to promote economic growth and increase the fiscal revenue; for this, the local government gave up its public service function of the short term income. However, the most important function of the government is the public service field. Therefore, in order to eliminate the selectivity to perform their duties of local government, it is necessary to rebuild the incentive and restraint mechanism of local government.