Institutional Innovation on Supply of Local Public Goods

Under the market economy conditions, the main function of local government is to supply kinds of local goods to meet the common demands of residents and enterprises. But the supply and the production of government are not the same. The main defect on current supply system of local goods is over-monopolization by local government and sectors. According to the principles on the production and supply, direct and indirect production, so to break monopolization, to open goods market to the world in order to promote the marketization of goods, to form the internal competition of public and private, all of these will increase the supply effect of goods, enhance welfare, and benefit to the course of marketization in China.