Incentives and Coordination: A Spatial Political Economics of Central-Local Relations

Taking the “long-term,holistic,and multidimensional” goal of high-quality development as its normative framework,this paper systematically analyzes the structural challenges in China's central-local relations and their governance pathways.The behavioral tendency of local governments to pursue short-term,localized,and one-dimensional objectives is not merely a result of simple policy implementation deviations,but a rational choice embedded within four interrelated structural tensions:those of time,space,objectives,and the mismatch between responsibilities and financial resources.At the macro level,this rational individual behavior in local competition can lead to unintended consequences such as the spatial misallocation of resources,structural dilemmas in underdeveloped regions,convergence of regional industrial policies,the proliferation of moral hazard,and allocative inefficiencies of major productive forces.Resolving these structural contradictions requires a systematic reconstruction of incentives and constraints,synergistically promoted across six dimensions:guiding the philosophy of political achievement,implementing differentiated performance assessments,reforming the fiscal and taxation systems,building a unified national market,optimizing the allocation of administrative powers and responsibilities,and improving oversight systems.Concurrently,it is crucial to recognize that information costs,moral hazard,the rule-of-law dilemma,and the challenge of balancing centralization and decentralization constitute four fundamental hurdles in deepening reform.The optimization of central-local relations in China is,in essence,a dynamic process of continuously recalibrating local government behavior,steering it from an individual rationality that pursues “short-term,localized,and one-dimensional” growth toward an integrated rationality that aligns with the nation's “long-term,holistic,and multidimensional” development.