Zhejiang's Phenomenon has been recognized as one of the successful examples in China's social and economic transitions since the implementation of reform and opening-door policies in the late1970s .The development of prosperous counties is one of the key factors in the Zhejiang's Phenomenon . On the one hand,the innovative policies emphasized by local governments have provided a good environment to promote the successful economic growth among these county governments .On the other hand,the success of the local economic development has resultedin new opportunities for thesecounty governments todevelop additional innovative policies to deal with new challenges . The interaction between government innovation and county development has created a good cycle to promote the successful economic and social transitions in Zhejiang's county governments.