Reflection on Essence of Cities from Perspective of Transaction Costs——Discussion on Urban Fiscal Reform Path
The origin of the city and its evolution has become a symbol of human modern civilization.The root cause is that humans are trying to minimize transaction costs and maximize the agglomeration effects,so as to better meet their own survival and development needs.However,in the process of large number of elements gathering in the city,if the urban governance capacity cannot match the speed and scale of the element aggregation,it will increase transaction costs,which is not conducive to achieving agglomeration effects.Urban fiscal is an important foundation and pillar for the improvement of urban governance capacity.In order to reduce transaction costs,urban fiscal reform need to be carried out from the perspective of enhancing national governance capacity,by dynamically adjusting financial and administrative powers to adapt to the objective trend of the elements gathering towards cities,especially in large cities.