A Proposal of Institutional Innovations for Urban-Rural Coordinated Development in China

Abstract

This paper analyzes urban-rural coordinated development in a region, where big city and large rural area coexist, and proposes some major institutional innovations. Our basic assumptions include: the existence of large rural area cannot be changed in the short term; people's mobility will continue to increase in metropolitan areas; long-term discrimination against peasants will disappear. We submit that urban-rural coordinated development is not equivalent to urban-rural integration, regional urbanization or urban-rural equalization. Local public goods and social welfare should be different by areas instead of by people's occupation or social status. Local public finance should be reformed to rely on property tax instead of landing leasing revenue. The efficiency, integrity and representation of peasant collectives is the key to reforms in the countryside. Voluntary organizations should be emphasized at neighborhood level and local governance structure should be simplified in metropolitan areas.