Based on the county-level data of total factor productivity(TFP) growth rate, tax effort and public expenditure, the Spatial Lag Model is adopted to analyse the influence of the latter two on the former. The empirical results show that there is a strong spatial correlation of TFP among the 101 counties in Inner Mongolia. Tax efforts have slightly positive contribution to the TFP, while public expenditure brings strong inhibition. The implication is that the high economic growth of a region only comes when the increase of the total factor growth rate and the improvement of its overall welfare are endogenous. Institutional improvement, technological advances, and a high savings rate are the sources of economic growth, but the momentum of high quality growth mainly lie in technological progress. The focus of supply management in developing regions must be technological innovation.