Endogenous Governance: Governance Way and Realization Path for Construction of Chinese Characteristic Town

Jing ZHAO, Jinglei WANG

Business College of Southwest University, Chongqing 402460, China

Abstract As an important carrier of China’s new urbanization, characteristic town can inject new vitality into local development, thus it is of great significance to urban-rural integration and rural revitalization. From the perspective of endogenous governance, it is able to fully understand the governance connotations of characteristic towns in the governance framework of image, instrument and action. Interest integration and sustainable development are the essential attributes that endogenous governance endows characteristic towns with vitality. The construction of characteristic towns follows a certain development logic. Roughly, it undergoes the development and transformation process of policy guidance, multiple governance, and endogenous governance. On the basis of this development logic, it is feasible to come up with a realization path for endogenous governance in characteristic towns in terms of functional elements, internal motivation and content innovation.

Key words Endogenous governance, Characteristic towns, Governance body, Industry driving

1 Introduction

In July 2016, the Ministry of Housing and Urban-Rural Development, National Development and Reform Commission, and Ministry of Finance of China jointly issued the

Notice

on

Cultivation

of

Characteristic

Towns

, and announced 403 state-level characteristic towns by two batches in October 2016 and July 2017, respectively. From then on, Chinese characteristic towns has been developing like bamboo shoots after a spring shower. Such hot situation of construction of characteristic towns has become an importance direction of China’s new urbanization, and the construction of characteristic towns concerns the promotion of many national strategies such as the urbanization and industrial transformation and upgrading. Under the promotion of current policies, the development prospects of characteristic towns are bright, but when the policy effects gradually decline, it is an urgent problem how to maintain the vitality of development and continue to play a role in the promotion of national strategy as an independent development entity. The construction of characteristic towns is jointly carried out by the government, the market, and the society, thus the maintenance of its vitality should be discussed from the perspective of the multiple subjects of public governance and their interactions. From the concept construction of characteristic towns, industrial planning and upgrading to the formation of an integrated pattern of industry, town, human, and culture, it is necessary to incorporate governance theory and practice. In the globalization of social governance, it is particularly necessary to clarify the governance approach for the construction of characteristic towns.

2 Overview of research of characteristic towns

2.1 Western research

After the rapid development of the Industrial Revolution, the urbanization process of Western countries has accelerated, and a large number of people and a variety of industries have started to agglomerate, forming many large cities. However, there also appeared various of problems such as urban congestion, environmental pollution, and cultural integration of classes. In this situation, the role of the construction of small towns in alleviating the problems of urbanization started to become prominent. Small towns undertake the functions of population transfer, characteristic industry development, and cultural accumulation in big cities, and carry the residential and living functions of the aboriginal people and the outside middle class, forming the spatial pattern of human-industry harmony, and have become an important link between big cities and the rural areas. For example, technology town in Silicon Valley of USA, wine town in Meersburg of Germany, and bullfighting town in Ronda of Spain,

etc.

In western countries, there is no special research on characteristic towns. Most researches focus on discussing how small towns carry out reforms, community management, and sustainable development. Western scholars have studied small towns in respect of issues of sustainable development, environment and society. When studying rural towns in USA, Green

et

al.

pointed out that the industrial economy is the direction of the development of small towns. The demand for supporting industries will drive the construction of infrastructure, and at the same time, it will give rise to the development of tourism, consumption, education,

etc.

, especially the industry’s demand for labors will attract the influx of various skilled talents and change the local demographic structure. Woollettstudied the form of government participation in the construction of small towns, including organization and coordination, service guarantee,

etc.

; Pinsonclarified the important role of the government in the construction of small towns from the aspects of politics, economy, society, culture, and ecology; some scholars also pointed out that it is required to avoid excessive government administrative power, which may interfere with the independent development of small towns.

2.2 China’s research

At present, characteristic towns have become a research hotspot in China’s new urbanization. Since 2015, research on characteristic towns has gradually increased. Chinese scholars mainly focused on connotation interpretation, development content, and construction path of characteristic towns. In terms of the connotation interpretation, many scholars agreed with the Zhejiang model, that is, characteristic towns are not administrative divisions and industrial parks, but a new carrier to undertake the functional characteristics of urbanization and a new platform to promote innovation and entrepreneurship; some scholars enriched its connotation from the perspective of its compatibility with environmental, social, historical and cultural aspects. In terms of the development content, the academic circle mainly studied the driving of superior industries, cultural innovation and reconstruction. In the context of new urbanization, they studied problems of characteristic towns in resource advantages, population introduction, equalization of public services, and policy optimization, which has increasingly become an important research direction. As to the construction path, researches were mainly concentrated on the need to invest funds to improve the infrastructure, strengthen the enthusiasm of market entities to participate in the construction, some scholars focused on the protection of the ecological environment and historical culture.

2.3 Research on the governance of characteristic towns

In recent several years, the role of governance in the construction of characteristic towns has attracted attention from some scholars. From the perspective of precise governance, Min Xueqinheld that the characteristic towns can be brought into the track of precise governance in terms of the diversification of governance bodies, operating mechanisms, innovation systems, and performance evaluation. Wang Zhenpo

et

al.

analyzed the internal logic of the sustainable development of characteristic towns, and believed that the emergence and development of characteristic towns is an inherent need for the process of urbanization and regional economic development, and the factors that can enhance the endogenous development power of characteristic towns come mainly from the spillover effect of industrial agglomeration and the cohesion of reshaping cultural symbols. In the opinion of Li Qingfeng, to realize sustainable development of characteristic towns, it is necessary to improve the social governance level of characteristic towns in terms of cultivating governance capabilities. Hu Xiaowuthought that it is feasible to optimize the governance structure of characteristic towns through establishing a scientific process of governance, a governance committee system, and an investment construction and operation management system. From the perspective of social governance, Zhang Weiwen

et

al.

made an in-depth analysis of the governance issues of characteristic towns and elaborated the governance structure of characteristic towns.

In summary, the existing literature has made intensive studies on the construction and governance of small towns, which laid the foundation for this research. However, there is still a lack of analysis of the development logic and features of characteristic towns, especially the research is not deep on development orientation and endogenous power, multi-subject power structure and cooperation mode in the process of characteristic town construction.

3 Endogenous governance and characteristic town governance

3.1 Proposal of endogenous governance

The Report of United Nations General Assembly in 1975 (

Our

Common

Future

) pointed out that if development is regarded as individual emancipation and the overall development of mankind, then development can only be promoted from within the society, which is the original connotation of endogenous development. Endogenous development is a development model oriented towards improving regional public interests and maximizing regional economic and social benefits by integrating resources, industries and culture in the region. An important path of endogenous development is to cultivate the local independent development capabilities, and maintain the local ecological environment and cultural traditions. Taking local residents as the main body of regional development and making them the main participants and beneficiaries of regional development are helpful for achieving the above goals. This requires the establishment of a grassroots organization with extensive participation of local residents, and it is necessary to exert a great influence on local development decision-making through this organization. Therefore, endogenous development involves not only changes in development concepts, but also changes in organizational structure; taking local residents as the main body of development, cultivating local development capabilities, protecting the ecological environment, protecting the diversity and independence of culture, establishing grassroots organizations, and expanding the power of local autonomy have become the due meaning of endogenous development.

The theory of endogenous development has laid a foundation for the endogeneity of governance. Endogeneity is the key and core of governance, the decentralization of traditional political authority; it is a comprehensive mobilization of entities to participate in public affairs in terms of geographic scope, functional mechanism, resource allocation, interest orientation, norm formation, decision-making and policy implementation. The governance body includes the government, the government’s social institutions and actors, and there is power dependence among the multiple bodies involved in collective behavior and forms an autonomous network. This means that the governance body is changing, it means a new governance process, and modern society calls for new governance methods. From the perspective of market development, endogeneity is embedded in a fully competitive market environment, the actual market demand is the traction, each market entity spontaneously forms a benign order and conducts self-regulation, while the government can use this internal order to achieve effective governance. In addition, with the rise of state power and the demand for political modernization, endogenous factors are gradually expanding into grassroots governance; the endogenous power of internal governance elements in grassroots society has been strengthened, the internal order is maintained relying on spontaneous governance mechanisms, which is of great significance for maintaining the stability of grassroots social order and achieving innovative development.

Based on the above analysis, we proposed the endogenous governance. Endogenous governance is a connotative development model. Its ultimate purpose is to realize the coordinated growth of the interests of multiple entities in the region. The multiple entities including government, the market, social organizations, and the public spontaneously form an organizational form of network structure, make resource integration and cultural reconstruction, form new regenerative forces and realize diversified, cooperative, shared, and sustainable development.

3.2 Governance connotation of characteristic towns

Characteristic towns originated in Zhejiang Province of China. In the process of urbanization and industrial development, they continue to explore spatial carriers that are different from the development zone model. In view of the prominent role of characteristic towns in urbanization, the central government has gradually incorporated characteristic towns into the national strategy. With the promotion of policies, the construction of Chinese characteristic towns is spreading across the country, but the construction layout of characteristic towns has only taken the first step. How to carry out the later management, maintenance and operation concerns whether the characteristic towns can maintain their strong vitality, thus the governance of characteristic towns urgently needs to be put on the agenda. The governance of characteristic towns is mainly through establishing a certain cooperation mechanism to encourage the government, construction and operators, enterprises, employees, and community residents to reach consensus on the development strategy, development planning, operation management, and income distribution of characteristic towns. To achieve the above goals, characteristic towns need to innovate in governance, fully explore the resources and potential of all relevant entities, and summon up their participation enthusiasm.With reference to the analysis framework of Jan

et

al.

on governance, the governance connotation of characteristic towns can be fully understood from three aspects, namely, image, instrument, and action. The image answers the question of why conducts governance and who undertakes governance. The governance of characteristic towns is to solve the problem of insufficient policy to promote the development of characteristic towns in the later stage, to fully exploit their own development potential, ultimately to achieve the coordinated development of stakeholders. In this process, a governance alliance composed of local governments and people, market-oriented enterprises, industry alliances, think tanks, and expert think tanks, undertakes the important task of town governance, and governs the normal interactions, decision-making mechanisms, and benefit distribution within the alliance, which are also important points of governance. Instrument is the intermediate elements of governance, it connects the image and action, and its types and scope are affected by the social status of the governance subject. Since the social status of the subjects of governance alliance is diverse, policy planning documents, characteristic industrial policies, and community service agreements may become governance instruments of characteristic towns. Action means the implementation of governance instruments. Actions include both conventional policy implementation activities and social mobilization activities. Similarly, specific actions in the governance process of characteristic towns mainly include the implementation of industrial policies, service agreements and other rules, and the coordination work taken to implement the rules.

4 Development logic of characteristic town construction from the perspective of governance

Driven by industries, traditional small towns have gradually developed into a pattern based on a specific industry. However, some scholars, when discussing the construction process of characteristic towns from the perspective of process theory, pointed out that although characteristic towns are also a modern regional growth model driven by industries, they are not completely similar to the previous development models, and their outstanding feature is cultural innovation and reconstruction. This is just consistent with the connotation of endogenous governance, that is, taking cultural integration as the core and integrating regional resources to form a new regenerative force. From the initial industry driving to the final cultural reconstruction, characteristic towns are experiencing different construction processes and call for corresponding governance models.

4.1 Policy guidance: a strong push from a single governance body

Public policy is a code of conduct jointly formulated by the government, non-government public organizations and the people, in order to implement common management of social and public affairs within a certain period of time, accordingly achieve the development of things or problem solving. Nevertheless, the government is still the main body to undertake the functions of policy formulation, implementation, management and control, and assumes the main responsibility for social public affairs. In the early stage of the characteristic town construction, the government needs to mobilize a lot of resources and formulate construction specifications to lead the construction of characteristic towns. From the perspective of policy function, the existing policies for the characteristic town construction mainly include the following three categories. (i) Strategic functional policies formulated to realize the functions of characteristic towns in promoting the implementation of national strategic goals. For example, the State Council of China released the

Poverty

Alleviation

Plan

for

the

13

Five-Year

Plan

Period

(

2016-2020

), requiring to build a batch of characteristic towns that can radiate the employment and increase the income of the poverty-stricken people. (ii) Construction directional policies formulated for the specific planning of the development direction and content of characteristic towns. For example, the

Guiding

Opinions

of

the

National

Development

and

Reform

Commission

on

Accelerating

the

Construction

of

Beautiful

and

Characteristic

Small

(

Cities

)

Towns

clearly pointed out building characteristic towns in the areas of leisure tourism, trade and logistics, intelligent manufacturing, science and technology and education, and also pointed out comprehensively promoting the infrastructure, characteristic industries, public services and entrepreneurial innovation in characteristic towns. (iii) Development support policies formulated to provide technologies, finance, talents and other resources for the sound and rapid development of characteristic towns. For example, the

Notice

of

the

State

Council

on

Printing

and

Distributing

the

13

Five

-

Year

Plan

for

National

Informatization

pointed out that the development of informatization should be supported to promote the development of smart towns and characteristic towns in small towns to achieve characteristic and differentiated development. The above three types of policies made a comprehensive planning and guidance for characteristic town construction, and make an overall layout for the strategic positioning, development direction, and resource support of characteristic towns, thus they are important for promoting the acceleration of characteristic towns across the country. Public policies are external factors to promote the construction of characteristic towns. However, in the early stage of construction, characteristic towns must rely on the guidance, regulation and distribution functions of public policies, straighten out the relationship of interests of all parties, and create a social environment favorable for their own development.

4.2 Multiple governance: frequent interaction of multiple governance entities

The essence of governance lies in the mechanism that it relies on, not the authority or sanctions of the government, but on a new type of structure or order. In other words, it is not strengthened by the outside, but a structure in which many participants carry out multiple governance and interactions. Just for this reason, characteristic towns are a long-term governance process from development and construction to value formation, and need a mature operation model for development. However, the input of policy resources cannot always be maintained at a high level. The spontaneous and conscious input of various subject resources in the region has become inevitable to continue to promote the development of characteristic towns. Compared with only taking government providing public policies as the early stage of governance, this stage should weaken the government power and it should be a process in which market entities, various social organizations, and local people participate together and the influence of multiple subjects gradual increases. In this way, the advantages of organizations can be complemented, and the interactive relationship of multiple governance can be formed. According to the current practice in characteristic towns, governance entities mainly include the following six types: (i) governments that formulate policy plans, build development platforms, and provide administrative services; (ii) town and village economic organizations that undertake economic projects and intervene in profit distribution; (iii) building developers who develop infrastructure and create residential and commercial spaces; (iv) investors who invest in project construction and provide financial leasing; (v) operators who provide industry consulting and are responsible for investment and operation; (vi) local employees and people involved in employment and residential life. The development, construction, and brand transmission of characteristic towns cannot be separated from the participation of the above entities. The interactive relationship between various entities is essential to form development synergy and build a harmonious environment.

4.3 Endogenous governance: integration of interests of multiple governance entities

The multiple governance has brought opportunities to enhance the connotation of social governance, making governance concepts present diversity, and network, cooperation, and precision have increasingly become the themes of the governance era. The endogenous governance well integrates the above themes, and realizes the overall arrangement of the interaction mode, cooperation mode, and demand matching of multiple entities, so as to stimulate the endogenous power of regional development. However, the governance of characteristic town construction should not just remain at the participation of multiple entities. Although the participation of multiple entities can enrich resource input and speed up town construction, it does not solve the problems of the internal power and realization methods of town construction. The highest governance approach for characteristic towns is endogenous governance. Endogenous governance is the structural adjustment and refinement of the comprehensive system with the participation of multiple entities. It reflects the value orientation of the government, the market, the society and the people sharing the benefits and risks. Therefore, the governance goal of characteristic towns is to achieve coordinated growth of the interests of all entities within the small towns; the governance structure is based on a network structure to build an equal and interdependent relationship between entities; the governance method is based on resource sharing as a starting point to build an overall structure of service, coordination, and cooperation; the governance model is based on precise matching of demands to establish a governance plan that targets development issues and actual demands The ultimate goal of construction of Chinese characteristic small towns is to realize the "four in one" of industrial growth, tourism and vacation, community function, and cultural inheritance, and the pursuit of compatibility of production development, life and living, and ecological conservation, but its construction process is not overnight, and its governance process is also extremely challenging. Endogenous governance is highly compatible with the demands of characteristic towns in realizing the main interests, enhancing core competitiveness, and establishing unique brand culture, which are helpful for building characteristic towns into a geographical space that is suitable for living, working, endowment and tourism.

In summary, governance is a gradual development. It is a process from single governance to multiple governance. In the early stage of this process, it is the government’s public policy-oriented governance, and gradually transitions to a networked governance with multiple participation, and then develops into a deeply integrated endogenous governance. The governance of the construction of characteristic towns is changing all the time, but mostly follows a complete process of policy guidance, multiple governance, and endogenous governance.

5 Realization path for endogenous governance of characteristic towns

5.1 Optimizing the functional elements of endogenous governance in the construction of characteristic towns

(i) Strengthening the functions of non-governmental entities and mobilizing the initiative of governance entities. The main point of strengthening the main function of cooperative governance is to realize the function of participation, and fully mobilize the initiative of non-government governance entities on the basis of scientifically designing the participation functions of multiple entities. First, it is recommended to strengthen the economic development functions of market organizations by means of market operations. Enterprises and the government jointly operate the construction of characteristic towns, establish an institutional mechanism for enterprises to participate in policy formulation, and make the overall construction of industrial planning, land development, talent introduction, and technological innovation in characteristic small towns taking the investment and operation model based on the cooperation between the government and social capital. Second, it is recommended to take the social autonomy as guidance, and strengthen the social participation function of social organizations. The construction of characteristic towns involves the protection and development of local traditional culture, the construction of public cultural facilities, and community security. It is recommended to hand these activities involving the interests of the masses to social organizations themselves, and the government should give social organizations the planning and management functions of related affairs, so as to give full play to their advantages in mobilizing social resources.

(ii) Establishing a networked interactive structure to realize the effectiveness of governance. The governance of government, market, and society is characterized by network governance and multiple level, and the interaction between entities is equal, that is, there are multiple centers in the governance network, including cross-cooperation at different levels. The platform and network of the operation mechanism are effective ways to realize the networked interactive mode of characteristic small towns. All entities involved in the construction of the town exchange information share resources and respond to demands on a networked interactive platform. Such interaction is neither one-way, nor authoritative, but a conscious and spontaneous interaction of all entities. In addition, it is necessary to establish a set of norms and systems for platform operation, and make clear the norms and systems in the form of articles of association, regulations, and contracts. With the deepening of the small town construction, each entity will become more and more familiar with institutional norms such as organizational responsibilities, decision-making methods, and self-discipline mechanisms. Their interaction will become much more frequent and overlapping, so as to better realize the exchange and interaction of resources and information in the organic network as a whole.

5.2 Internal driving force of endogenous governance in the development of characteristic towns

(i) Developing human capital and strengthening efficiency transformation. As the first element in the construction of characteristic towns, human capital includes not only high-end governance and operation teams formed during construction, but also grassroots organizations and social personnel serving local construction. Therefore, to gather human capital in characteristic towns, on the one hand, it is necessary to introduce and train high-level talents with the characteristics of cross-industry integration, knowledge-intensive, and new and high technologies. On the other hand, it is necessary to give full play to the role of local groups such as college student village officials, returned entrepreneurs, agricultural technology cadres, rural wealth leaders and farmer entrepreneurs. Since the transformation of human capital efficiency in characteristic towns is mainly manifested in the sustainable development of strategic planning, industrial positioning, cultural mining, and resource introduction, multiple entities can jointly formulate education investment policies, establish a benefit distribution mechanism that combines current and future, bundle talents at all levels with small town construction projects, and fully tap the potential of various elements such as industrial clusters, history and humanities, so as to realize the efficiency transformation of human capital.(ii) Promoting technological progress to generate economic benefits. Compared with the traditional technology introduction, the technological progress in the small town shows endogenous characteristics, which is an important direction for the transformation of the economic growth power structure of characteristic towns. Therefore, characteristic towns should introduce high-end elements such as talents, technology, knowledge, and information to research institutions such as enterprises, universities, scientific research institutes,

etc.

, so as to promote a large number of technological activities such as process reengineering, technology research and development, and knowledge innovation, and vigorously develop cutting-edge technologies such as big data, cloud computing, Internet of Things (IoT), and artificial intelligence. Further, multiple entities can exchange cutting-edge technologies and innovation results by establishing interactive platforms, holding technology conferences, science and technology salons, and achievement release conferences, and strengthening the multiplier effect of regional technological progress. In terms of technology transformation, it is recommended to deeply integrate town construction and technological progress, and establish a supply and demand platform and mechanism for technological achievements and project construction. Also, it is recommended to promote the transformation of economic benefits of technological achievements and strengthen the legalization of intellectual property rights.

5.3 Making planning for the content innovation of endogenous governance in the characteristic town construction

(i) Always focusing on core industry advantages and cultivating the sustainability of governance contents. The integration of industry, town, human, and culture in characteristic towns should be realized around the industrial foundation. Therefore, the core of the governance content of characteristic towns is to cultivate and maintain the sustainability of industrial development. Before making planning for the development steps of characteristic towns and setting phased goals, the governing entities should first explore local core industries, identify competitive advantages, and always plan and design around the fundamental industrial development resources within the towns. It is necessary to ensure that characteristic towns can continuously cultivate new products, new business forms and new models under the framework of existing industries, so as to realize the sustainable development and construction of the industrial resources of characteristic towns.

(ii) Deeply integrating local cultural characteristics and innovating diversified governance strategies. In the development and construction of industrial resources in characteristic towns, local governance entities have different opinions and direct interest demands on resource development methods, which should be expressed through certain channels and can be achieved through repeated consultations and discussions among multiple entities, so as to realize coordination of the interests of multiple entities. Particularly, the realization of the interests of multiple governance entities should be combined with local culture, to come up with innovative development strategies with local characteristics. On the basis of this, characteristic towns can further build their own localized innovation system, establish an innovation platform for industry-university-research institute cooperation, cultivate and introduce innovative talents, continuously explore diversified governance strategies, and finally form an innovation model based on resource development.