Regulation Failure Caused By Multi-dilemma Of Governance

The reasonable existence logic of governments and state-owned enterprises arethe of market failure and supply of public goods such as environmental protection.But the Governance issues bothering governments、banks、firms and distributiondisorder caused by governance issues are prevalent among transitional economies.The insiders who lack of balancing mechanism such as effective legal surveillanceand property rights protection seek to co-operate for the sake of political-promotionand self-interest of control right, which leads to failure of the macro regulation policy“Green Loan” aiming to push sustainable development as far as resources-misallocation and social welfare losses.On the above background, for the sake of governing ecological andenvironmental issues arising from the China’s economy development, government hastaken steps to curb the ecological worsening and environmental pollution. As one ofthe crucial part of relevant policies, green loan’s implementation effect was not asgood as expected. This paper comprehensively uses info-economics、new institutionaleconomics and new political economics to do research on green loan dilemma, makessuch conclusion: the multi-governance dilemma faced by governments、 banks,state-owned enterprises, causes local governmental officials、state-owned banks’managers、executives of state-owned enterprises all lack of incentives to implementgreen loan. So the financial resources aren’t distributed in the way that maximize thesocial welfare, and this leads to resource misallocation and policy failure.At first, this paper states that based on “emerging and transitional” institutionalbackground, present china is facing the multi-dilemma of official governance、bankgovernance、 state-owned enterprise governance. We conclude that the politicalpromotion tournament centering on economic indicators is the fundamental reasonwhich leads to governmental interference and further multi-governance dilemma; atsecond, we use the awkwardness of china’s green loan implementation to state that theenforcement of green loan requires the perfection and effective operation of microgovernance mechanism, and this proves that the perfection of corporate governanceand outside governing circumstance is very important to build efficient macro policytransmitting channel.The policy reflection of this paper’s conclusion is: the key to make macrogovernance policy which aims to protect the environment is reform governmental function and diminish interference, strengthen legislation and property protection,complete the governance mechanism of government、bank and firm.