Abstract

As far as regional economy is concerned，all of long-term and universal problem result form mechanism. The new institutional economics reveals that institutional change is the essential reason for social progress. Third Plenary Session of the 18th CPC Central Committee claimed inter-regional coordination mechanism. Chinese President Xi Jinping required to set up the synergic development mechanism for Beijing Tianjin and Hebei as soon as possible On February 26，2014. The key of synergic development mechanism for Beijing Tianjin and Hebei is coordination of economic interest. This book will only analyze the coordination of economic interest for Beijing Tianjin and Hebei in the provincial（or municipal）governmental level. Without special mention，the inter-regional interest in this book refers to the inter-regional economic interest. In other words，synergic development mechanism for Beijing Tianjin and Hebei is just the coordination mechanism of economic interest for Beijing Tianjin and Hebei.

The key conflict of the Beijng Tianjin and Hebei is the imbalance of inter-provincial economic interest，which is demonstrated in the following：similar industries and vicious competition，regional market segmentation and local protection，insufficient supply of inter-provincial public goods，polarization between the rich and the poor，ecological deterioration，political performance competition and repeated construction，etc. The direct reason for the imbalance of inter-provincial economic interest is the conflict between the objective needs of regional economic integration and the administrative boundary segmentation，and the basic reason is the bounded rationality of local governments and the imperfections of market. Based on what’s mentioned above，it’s obviously important to set up the coordination mechanism for inter-provincial economic interest among the Beijng Tianjin and Hebei. The theoretical significance of this book is to break the regional administrative boundary segmentation and the interest curing of local governments，and design the coordination mechanism for inter-provincial economic interest by the intrinsic link of economy to balance the inter-provincial economic interest.

To break the regional administrative boundary segmentation and the interest curing of local governments，this book innovates the synergic development mechanism for Beijing Tianjin and Hebei. Joseph Alois Schumpeter told us that innovation is recombination of factors，therefore，the synergic development mechanism for Beijing Tianjin and Hebei has to break the pattern of vested interests.This book testifies that the integration of regional evaluation indicators is the Pareto optimality condition for the redistribution of inter-regional economic interest for Beijing Tianjin and Hebei.

Inter-regional economic interest stresses the inter-regional relationship，focusing on the redistribution of economic interest. It means the exclusive benefits that a specific province（or municipality）gets from other provinces（or municipalities），and falls on the category of the redistribution of social benefits. It is the spatial advantage demonstrated by the incomplete liquidity of productive factors，incomplete competition of the market and the incomplete rationality of local governments，and it takes the form of tax sharing for inter-provincial industry transfer，cost amortization of inter-provincial infrastructure co-building，inter-provincial ecological compensation，etc.

Synergic development mechanism for Beijing Tianjin and Hebei is a long-term mechanism for the transfer and distribution of inter-provincial economic interest，which takes the form of specific joint committee system. It is the rule to solve the dispute of inter-provincial economic interest，the contract among local governments and a function for interest distribution. It is also a process for the redistribution of inter-provincial economic interest where the reputed agency for regional economic coordination is authorized by the country to evaluate the position of region and make quantitative legally decisions. Coordination for inter-provincial economic interest is the redistribution of inter-provincial economic interest，so the equilibrium of this coordination is the equilibrium of this redistribution. The integration of local governmental evaluation indicators is the precondition of the coordination mechanism for inter-provincial economic interest to break the barriers of administrative boundaries.

The top-level design of the synergic development mechanism for Beijing Tianjin and Hebei includes five sub-mechanisms，namely arbitrage mechanism，negotiation mechanism，sharing mechanism，amortization mechanism and compensation mechanism. From the perspective of spatial spillover of regional economies，local governments need to make cross-border and horizontal negotiation through joint meeting of mayors，which is negotiation mechanism；based on incomplete rationality of local governments and the incompleteness of market，the central government needs to set up an authoritative arbitrage authority above local administrative boundaries to make vertical coordination when self-motivated negotiation of local governments cannot reach consensus on some cross-border cooperation and key projects，which is arbitrage mechanism；from the perspective of fiscal and taxation system reform，the horizontal tax sharing mechanism should be set up for cooperation on profitable products，like inter-provincial transfer of industries，which is sharing mechanism；from the perspective of investment and financing mechanism reform，cost amortization mechanism should be established for cooperation on quasi-public goods，like co-building of cross-border infrastructure，which is amortization mechanism；from the perspective of reform on property right system of natural resources，ecological compensation mechanism should be set up through horizontal financial transfer payment for pure public goods，like water，ecological environment，etc.，which is compensation mechanism. Among the five sub-mechanisms，arbitrage mechanism and negotiation mechanism demonstrate the form and procedure of coordination while sharing mechanism，amortization mechanism and compensation mechanism show the contents of coordination. Arbitrage mechanism belongs to vertical coordination，ensuring its fairness；negotiation mechanism belongs to horizontal coordination，ensuring its efficiency. Coordination for inter-regional economic interest should be both vertical and horizontal. The path choice of the synergic development mechanism for Beijing Tianjin and Hebei is vertical and horizontal integration. Only when the five sub-mechanisms work together can they break the barriers of administrative boundaries and make inter-regional synergic development. To ensure its effectiveness，the synergic development mechanism for Beijing Tianjin and Hebei should be designed in the form of contracts，which endows legal effect on it and ensures its enforceability and rigid binding force.