Abstract: Optimizing business environment plays an important role in transforming government functions and stimulating market vitality. However, previous studies have not fully analyzed the motivations of local governments for optimizing the business environment, resulting in a lack of sufficient understanding of the reasons for the ineffectiveness of local governments in implementing relevant policies. In fact, the business environment is essentially the institutional environment. Based on the types of institutional changes the paper constructs an analysis framework of "linkage bewteen internal and external factors" to analyze the motivations of local governments to optimize the business environment from both internal and external dimensions, thus providing dynamic support for stimulating local governments' enthusiasm and creativity to optimize the business environment to promote the continuous optimization and upgrading of the business environment at the national level.