Policy Deviation, Moderating Effect And Local Economic Growth

The report of the 19th National Congress of the Communist Party of China pointed out that socialism with Chinese characteristics has entered a new era.The main social contradiction in our country has been transformed into a contradiction between the people’s growing need for a better life and unbalanced and insufficient development.The reason for this unbalanced and inadequate development between regions is not only related to their own resource endowments and geographic location,but also related to the "discretionary power" possessed by the local government itself.In fact,after the implementation of the tax-sharing system reform,local governments have relatively independent economic interests,and the relationship of vertical competition between local governments and the central government has begun to form.This is one of the external manifestations of vertical competition between central and local governments.Deviations in policy formulation.How to treat the impact of such policy deviations on local economic growth is the main issue to be studied in this article.First,this article combines government competition theory and principal-agent theory to expound the influence of government competition on local economic growth and points out the phenomenon of policy deviations due to the principal-agent relationship and vertical competition between the central government.Secondly,it uses an index that measures the degree of deviation between the central government and local governments in formulating PPP policies,the PPP policy deviation index,and uses this as a measure to consider the impact of policy deviations on local economic growth.Taking the 115 prefectures and cities that issued PPP policy texts in 2016 as a data sample,the interaction terms of multiple variables such as policy deviation index and urbanization rate are introduced to verify the moderating effect of policy deviation.Then,through the establishment of ordinary OLS regression and spatial lag models,the impact of policy deviations on local economic growth is studied.Finally,in order to verify the reliability of the conclusion,the relevant data in2017 were used to conduct a robustness test.The research results show that the policy deviation index has a negative correlation with the local GDP per capita: that is,when the local government exercises low "discretion" and maintains convergence with the central government when formulating PPP policies,the policy deviation index is relatively relatively high.At this time,the level of local economic development will show a downward trend.However,as the urbanization rate increases,after reaching a certain critical point,this negative correlation disappears,and the two transform into a positive correlation.The reason may be that the local government has obtained a certain "demographic dividend" through the increase of the urbanization rate,and it is internally transmitted to the variables that promote economic growth through the comprehensive indicator of the urbanization rate.Based on the above research results,this article puts forward corresponding suggestions on how to effectively use policy deviations to improve the level of local economic growth.