At present， China still suffers from imbalanced and inadequate development between urban and rural areas and as well as regions in China. How to increase the income of collective economy in villages and achieve rural revitalization and common prosperity has become an important issue in the development and governance of local governments. Taking rural development corporation in D District of Zhejiang Province as an example， this paper analyzes the operation process， mechanism and institutional causes of the “Xiaobo” behavior of local government aimed at increasing the income of rural collective economy in the county-level society. The study found that the local government mobilized the villages to join the rural development corporation，uniformly conducted various forms of market-oriented operation， and increased the income of village collective economy through profit sharing. This has narrowed the development gap between rural areas and achieved the “Xiaobo” goal of local governments in an innovative way. The effective operation of “Xiaobo” behavior is achieved by shaping policy legitimacy， county-level political integration and public-interest welfare agency. Institutional factors such as innovative competition under target assessment， low-risk development preference under strong supervision and the governance value of collective economy to strengthen the economic foundation of village governance have shaped the characteristics of local government’s strong public welfare operation under the background of common prosperity， and its policy practice has provided opportunities for the rural collective economy to achieve equal development.