What should a government do for a city’s economy? Government policy plays imperative role in urban economic development and restructuring while economy condition is crucial for the legitimacy and abilities of the government. No matter in the developed and early-industrialized cities in facing severe need of economy restructuring, or in the vigorous burgeoning cities, or in the less-developed cities who need industry transfer undertaking and industrialization to create employment opportunity desperately for the expanded urban population, municipal government needs to review the history and all-rounded condition of the economic development and drive the economy entities according to review by providing incentive policies and sound and effective infrastructure such as transportation system. In this ever-changing world, conceptions of ecology city and sustainable development are thriving, the transnational economy is boosting, which make economy challenges of government more onerous and needed. Respecting and protecting property rights of every economy entity including individuals and legal institutions is the foundation and the must of government’s participation in development. The progress of urban industry development as well as redevelopment in China almost always goes along with land demolition and relocation, and coercing demolition generates great grievance in citizens. Land property transfer from owner residents to the corporations and other investors who are going to found their commercial estate in this area should follow the principle of voluntary exchange. But the familiar fact is that government becomes the “broker” or agent of the land property exchange, by forcing the owners to give out the land with very low compensation, and then selling the land to the investors bidding the highest price. This action fits the rational-economic man theory but badly breach the obligation of protecting property rights and economic legal system. The modern government mustn’t be profit-seeking in economy activity out of its impartial status of monitor or referee in the market functioning. Review and reflect to decide the most appropriate strategy and model of economy development. The former example of housing demolition in China doesn’t mean that government shouldn’t be an active participant in urban economy. In the urbanization and urban industrial layout construction, the commonly adopted market-oriented economy believes that market is the steer of the development while the visible hand of government should keeps idle in economic activities. On the other hand, the planned economy acclaims that government should map out the city’s industrial layout, set rigorously controlled development plan that drive economy entities and resources and supervise the whole constructing process. Market’s mechanism is in the backseat or piddling. Referring the history of both fail in Soviet Union’s undue planned economy and the alternate collapses of undue free market economy in Western world partly due to the speculating opportunistic activity, I believe there is no one “catholicon” model and every government should step back, do sound demographic, historic, geographic and neighbor cities interrelated investigation and research of this city, evaluate the industrialization stage of it, then decide which the development model or strategy. The urban flagship, so called “Cities of Magic” such as Miami and Hong Kong were thriving because of the openness, free market and trade in 20th century, which shows market rules work well with little government’s intervention. On the opposite, Erdos, a northern city of China on downhill, is facing bankruptcy recently because of the riskily used of high leveraged investment in real estate, showing the blindness of market, and the overdue industrial transformation when its old coal and mining industry is decaying shows the bad result of lacking economy governance and planning. Government needs to balance the function of market and itself according to their reliable review. In the trend of building ecology city and sustainable development, government is required to spend more resource effectively and be more concentrate on the incentive policy for economic entities on environmental programs and implement the ecology institutions better. France is very enthusiastic in ecology cities and awards 13 French cities as ecology cites because the commendable livability and the minimum redevelopment and waste in the ecological facilities building, which manifests the good thing government can do in the exquisite planning and constructing of ecology city. “Decentralization” of the economy governance and regulating can be a method of government with big potential. This means the government can use administrative, legal, economic and other approaches in market governance, NGOs can also cooperate with the government with variables of methods to counter balance the bad effect of free market, sometimes even have autonomy in a certain industry. Actually this kind of folk autonomy governance organizations in the form of guild and labor union has long been used in China, from Song Dynasty, in major early industrial and commercial cities. In the media industry in America, the NGOs such as MPAA(Motion Picture Association of America) and ESBR(Entertainment Software Rating Board) play a significant role in regulating and censorship. This kind of cooperation can help with the health and good function of the market and the economic environment. (5566)
Posted on: Wed, 12 Mar 2014 15:45:41 +0000
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