The Effect Of Local Government Competition On The Quality Of China's Economic Growth

Since the reform and opening up,China's rapid economic development is largely due to the local government to spare no effort in the development of economic.Under the dual stimulation of political promotion and fiscal decentralization,besides the condition of limited resources,the behavior of the local government is expressed as the competition for the flow of factors to promote economic growth.From the existing research,the local government competition behavior has promoted the regional economic growth.While these studies only focus on the impact of local government competition on economic growth,they ignore the impact on economic growth.With the current critical period of economic transition,it is necessary to study the influence of local government competition on the quality of economic growth.The main content of this paper is as follow:Firstly,describes the research background and research value,and introduces the research objects of this thesis,research methodology and innovation.Secondly,through the literature review and combing,find the shortcomings and blind spot of current studies,and then put forward the research topic of this paper.Again,make a definition of the connotation of economic growth quality index system,and describes the construction of the quality of economic growth from the five aspects of efficiency,economic growth,economic structure,economic growth,stability and distribution changes of residents welfare and environmental conditions according to the results of existing research,and calculates the quality of economic growth index for each province by principal component analysis method.Subsequently,find the focal point of local government competition through the analysis of the fact that the local government competition in China,and study the transmission mechanism of the impact of local government competition on the quality of economic growth.This paper mainly discusses how local governments affect the quality of economic growth by affecting the above five aspects.At last,this paper makes an empirical study on the relationship between the two.Because the competition of local government has the obvious spatial strategy interaction,this paper chooses the Spatial Durbin Model.At the same time,a fixed effect model was used to analyze the regression result.The paper uses the fixed effects model and Spatial Durbin Model from two aspects of national and regional respectively to do.The relationship between the two is the empirical test,the regression results are drawn as follows:first,from the national level,local government competition has a positive effect on the quality of economic growth,but through decentralization of local government competition under the quality of economic growth there is a reverse effect.On the view of regional regression,the result of the eastern region and the national level consistent with the national level,the central and western regions are reverse to the national level,but not significant.Sencond,the strategic interaction between the regions will have an inhibitory effect on the quality of economic growth,but the strategic interaction behavior under the decentralization channel can promote economic growth.According to the regression results,this paper draws the following conclusions:first,the quality of fiscal decentralization and economic growth relation exists in an inverted U type,which is in a certain range,with the degree of decentralization,the quality of economic growth will be improved significantly;when the degree of decentralization beyond a certain range,there are reverse changes in their relationship.Second,although the degree of decentralization has a growing trend,but the western part does not exceed a reasonable range,while excessive decentralization situation is in the eastern region,which deny to improve the quality of economic growth.Third,under the premise of a certain resource,the regional economic growth quality level will be improved if the region can obtain more Liquidity resources through the competition of the government.Therefore,regional strategic interaction has a negative effect on the quality of economic growth.The channel strategy interaction behavior of government decentralization is not conducive to enhance the quality of economic growth is due to that the exiting excessive competition will damage the area's tax base,which will reduce local revenue,and be not conducive to the region to futher improve the quality of economic growth,and even lead to the outflow of resources.Therefore,in the long run,this is not only harm to the improvement of the quality of economic growth,but also has inhibitory effect.Finally,this paper puts forward the following two policy recommendations:First,change the way officials check.First,expand the assessment index dimension,.we should not only focus on GDP growth,but also we need pay more attention to the local government to improve the environment,people's livelihood.By increasing the weight of this kind of assessment indicators we can change the local government preference for economic growth.Secondly,set suitable local assessment indicators to local conditions.Because there are differences between different areas in resources,geographical location and other aspects,so the problems encountered in the development process,which requires the formulation of assessment criteria to have variability.And it is unreasonable to take the same evaluation index system to assess all of the local governments.Second,deepen the reform of the financial system and establish effective public budget supervision mechanism.