A Study On China's Occupational Safety Regulation Reform

According to the theory of economic regulation, government regulation is the result of game among special interest-groups and the conflict of rules. The implementation of occupational safety regulation by the government is actually the administrative procedure by the regulatory agency. As an administrative procedure, the occupational safety regulation involves in the relationship among regulatory agencies, regulated enterprises and the employee who have different status and role in the regulation, among them the employer and the employee are litigants involved in occupational safety regulation, and the regulatory agency serves as middleman of the game and the agent of the outcome of the game.The status and role of government in the procedure of occupational safety regulation not only rely on their role to protect the public's interest, but also depend on the relationship between government and regulated sector. When the scope of regulation is limited to privately owned and controlled industry, government has no relationship with the regulated industry owning to ownership of enterprises, in this situation regulatory agency is just impartial arbitrator of the regulation, not involved in the game procedure, who act as agent of the game result and executor of the regulation policy.; while the government is also the owners of enterprises, regulatory agency may take part in the game to some degree. As the game players of the regulation affect the result of game, especially when the regulatory environment changes, the occupational safety regulation need make the appropriate changes and adjustments.Based on the thought of the relationship among the government (regulatory agency), the enterprises, as well as workers and how they affect the regulation development and regulatory reform, this paper pay more attention on the following three questions:(1) Occupational safety regulatory acts analysis between the government and the enterprises. Through principal agent model and regulation captured model this part is studied from two aspects, one is the regulatory agency captured by the regulated firms, and the other is not. (2) Analysis the acts between regulated firms and the workers. Through building game model between the firms and the workers, this part analysis competition between the workers and the firms as well as the firms'variation in occupational safety input. (3) Analysis of occupational safety and industrial injury insurance. Under the incomplete information, this part analyzes the role of industrial injury insurance to reduce the risk of occupational safety, and the asymmetry impact on the firms and the workers. These studies try to begin from the relationship between the game players, and further reveal the causes of the occupational safety problem and the principle Obstacles of regulatory reform.In the process of solving these problems, we reach the following main research point of view:(1) The smaller the losses caused by the default of regulatory agency to regulate, the more likely the firms reduce the level of occupational safety input. In reality, lots of firms'irregularities in the safety production input is owning to that the regulatory agency believes that even if the safety incidents occur , its loss will not be great to them.(2) The higher the regulatory agencies'monitoring costs , the more likely the regulated firms report false income to reduce extraction of capital investment, especially when the monitoring costs equal the loss of an accident without monitored, the best choice for the regulated firms is default , while the regulatory agency will face disaster consequences.(3) The higher ratio of bribery, the more likely the regulatory agency misuse its authority to seek rent. Research demonstrated that when the regulated demand for the regulatory policies, it is not entirely passive for the regulatory agencies to make rent extraction or rent-seeking activities.(4) The more stringent penalties the regulated firms were given, the more likely the regulated firms take a bribe. If the regulatory agency has discretionary power, the higher penal sum means giving the agent higher incentive programs, while higher incentive programs will give the regulated firms more potential rent which means higher stakes in collusion.(5) Collusion can improve regulated firms'revenue compared with no collusion between the regulatory agency and the firms, so wherever the regulated firms can collude with the regulatory agency, the regulated agency will prefer to default the safety production input act.(6) Under the incomplete information, the high-risk enterprises will be more inclined to deceive the workers engaged in hazardous job; while workers may underestimate their risk to make the choices which are not conducive for them. Therefore, the government should regulate the fields where the firms have private information, especially in occupational health and safety fields.(7) It is because the value of human capital of workers is low and the risk compensation they require for high-risk workplace is lower that the employer dares to take risks to violate the law, entirely neglect the life and health right of workers.8) The critical path to change workers'disadvantaged position in the game is to enhance the bargaining power of workers. The formation and maintenance of the system is the outcome of "participant" "interactive strategy", so it is important to enhance the workers'enthusiasm in the policy or regulatory decisions, which in turn depends on the bargaining power of workers.(9) Mandatory work injury insurance maybe unreasonable when workers underestimate the risk in the workplace. Underestimate the risk led the workers expose to the risk that can not be spread by the insurance, w hich means the higher level of work injury and lower occupational safety. Therefore it is better to understand the employees'estimate to the risk, before the government involve in the regulation.Through economic analysis of occupational safety regulation, it has revealed the underlying causes that form the current situation of occupational safety regulation:There is no clear division of labor among the regulators and the public functions are decentralized. There are limited resources for regulatory agency to use, so the regulation is low intensity enforcement. When the regulatory agency is captured by the interested group, the right of employee will be damaged. Some firms ignore the life of employees and don't make adequate input in safety production. The quality of employees is so low that they themselves ignore the occupational safety.Occupational safety regulation has both Specificity and Generality. In the market economy, China's occupational safety regulatory reform needs to draw upon the successful experience of foreign countries. In this paper, we analyzed some developed countries'experience in occupational safety regulation, it is mainly summarized in the following aspects: Sound legal system is the foundation to improve occupational safety regulation; strictly enforcement of the law is critical to reduce occupational injuries and illnesses as well as to improve regulation performance; establish an independent and professional law enforcement agencies; according to the national condition, reasonably determine the focus on occupational safety regulations; improve the mechanism of injury insurance and well educated the employees to improve the occupational quality.Since the founding of the PRC, China's occupational safety regulation system has changed several times, and the capacity to regulate the occupational safety and health has also enhanced. Under this new conditions, China's environment and conditions on occupational safety regulation have undergone tremendous changes. This paper demonstrates that China's occupational safety regulatory reform should do well in the following aspects: improve the occupational safety legislation and increase the cost of breaking the law; establish an independent law enforcement agencies and enhance the effect of regulation; strength the power of trade unions and establish an equal consultations mechanisms among trade unions, business and the government tripartite; increase the safety production inputs to protect production safety ; provide employees full information about the workplace and training on occupational safety; improve the industrial injury insurance system to make sure of the organic integration of industrial injury insurance and occupational safety regulation; establish a community supervision system and play the role of community supervision on occupational safety regulation.