Government Regulation And Industry Self-regulation

Government regulation and industry self-regulation are two kinds of institutions of market governance, they are mutually complementary. Both can regulate microeconomic main bodies respectively from legal system public order and systematic private order points of view. Concretely speaking, the government mainly asks for help of law and executes the mandatory administration means to give the market the juristical restriction. This can be regarded as a kind of legal public order, while the industry association then mainly asks for help of convention and unforced spirit guide to give the market morally control, this can be regarded as a kind of systematic private order. Government regulation and industry self-regulation take charge of a common function at the market, contributing to make up the government's shortage and better market governance.Industry self-regulation is an important form of self-governance. The achievement of a certain degree of industry self-regulation needs the help of self-organization, which is trade association. Self-regulation is an important duty of trade associations, at the same time, trade associations is a means to achieve self-regulation. Trade association achieves market governance through promoting the collective self-discipline of the industry members, namely industry self-regulation. The promotion of industry self-regulation is in line with the government's regulatory objectives objectively. Therefore, if we can utilize the strength of industry associations to management the industry itself, to promote industry self-regulation, and to assist the government to make up for its deficiencies in market supervision, then, the improvement of governance will have a greater potential. However, because of the problems of agent Identity, the dual nature of the organization and other reasons, industry associations in cooperation with the government often lack sufficient impetus. Therefore, in order to give full play to industry associations in the role of governance in the market, we must have a concrete analysis of industry associations'role, real conditions and effective path.In this paper, the conditions, obstacles, and the ways to promote industry self-regulation have been made a concrete analysis, the conclusions are following:At first, industry self-regulation's realization depends on certain internal and external conditions. In terms of internal conditions, industrial members'common interests are the base of industrial self-regulation, the self-regulation benefits constitute Industry self-regulation's motivity, these are in the point of corporate members. As far as industry associations are concerned, the legality is the precondition of the Industry self-regulation; the favorable internal corporate governance structure is the structural requirement; In terms of outer conditions, the threats of regulation and sanction by government are the external preconditions of the Industry self-regulation, the pressure from the society is the catalyst which can accelerate the industrial self-regulation. In China, the industry association's legality and internal governance structure are the most important factors that can influence the exertion of the industry association's self-regulation function.Second, in China, through industry associations to achieve self-regulation faces unique obstacles. These obstacles include:by the corporation's individual rationality conflicts with collective rationality and trade association's collective rationality conflicts with the public interest, causing the industry associations lack of willingness; by the power shortage, inadequate services and under-represented due to the lack of the credibility of industry associations; by the dual conflict on the nature, functions, areas and values leading to the trade associations'role conflict; by the unsound self-regulation codes, self-regulatory bodies, non-compliance review channel and drive mechanism bringing about the imperfect self-regulatory mechanism; And by government's own development, power anomie and power out of control bringing about government's concerns and worries. In each Obstacles category below, there are a number of sub-barriers.In the obstacles mentioned above, insufficient willingness, inadequate credibility, role conflict and imperfect self-regulation mechanism are the endogenous barriers for the Chinese industry association's self-regulation. Insufficient willingness and role conflict will not be completely avoided, only can be limited this kind of conflict within a maximum certain range. Credibility and self-regulatory mechanism are fully adjustable variables, in China, using of industry associations to promote industry self-regulation can firstly start from solving these two factors. The government's concerns and worries are the external constraints hindering the achievement of industry self-regulation. This factor can also only be an adjustment variable. In China, the role of the variable's extent directly related to the degree of the administrative functions change.Third, the reality path, that through industry associations promoting industry self-regulation is to complete self-construction to make the industry associations into a symbol of authority from the expression of channels, in order to enhance the validity of the Incentive and punishment. Setting up a business credit evaluation system and information disclosure platform, and giving industry members the selective incentives, such as the reputation incentives, policy incentives, performance incentives, priority motivation, self-regulation security, one-vote veto, bad credit information disclosure, to establish the linkage between the mechanism of association and so on. Through above methods increasing the industry self regulation's expected return, while increasing the expected cost of their lack self-regulation, to change the cost-benefit payoff matrix of industry self-regulation, So that making bilateral expected return between industry members are greater than unilateral speculative gains income, while unilateral income by self-regulation is greater than the bilateral speculative gains income, and ultimately achieve self-regulation successfully.Finally, given the industry association representing the interest of members and there is a gap between the public interest with the members'interest, industry regulation is still the responsibility of the government fundamentally. Therefore, the government should retain the ultimate power of industry management, in some important areas or extreme cases (for example, Industry association's collusion with industry members:price alliance,market segmentation and so on), encourage or punish to a certain industry or a certain firm from the outside directly, force to correct bad behaviors in a firm or an industry.