Reserch On The Supply Of Rural Public Goods And Its Effects In Less Developed Areas

With30-plus years of rapid development after implementing the reform and opening-uppolicy, China has officially become one of the middle income countries, with its economicand social development attracting the world-wide attention. However, standing at the newstarting point, we're facing numerous challenges, i.e., how to translate "the wealth of anation" to "the wealth of people". To achieve the latter, one method is to improve the supplyof public goods. As Justin Yifu Lin, the chief economist of the World Bank, mentioned, thecore of China's future reform lies on the transition of the government. The government shallbecome a service-oriental unit to mainly offer public goods to the people, so as to createwealth for the people. At present, China's poor supply on public goods cannot keep up withthe rising demand, lacking behind the country's economic development.When it comes to China's economic and social development, one cannot avoid talkingabout the imbalanced regional development and the dual economic structure of urban andrural areas. The supply of public goods is one of the issues in this background. Due to thelimitation on economic development, natural conditions and the environment, less developedrural areas are facing a more serious issue on the supply/demand of public goods. Therefore, ithas been a significant basis and social focus to effectively improve the supply of public goodsto less developed rural areas, so as to promote the productivity, social stability and upgradepeople's livelihood. Unfortunately, China does not have systematic recognition on this issue.This dissertation is an in-depth study on the supply of rural public goods and its effects in lessdeveloped areas. As the basic step to solve the problem of inadequate supply of public goodsin rural areas, this dissertation is very important to help strike a balance between demand andsupply, and improve the welfare of the rural people.On the basis of the study on public goods theory and its supply both at home and abroad,this dissertation has employed effective and numerous methods to study the current publicgoods supply and its influencing factors, social welfare effects and regional effects in lessdeveloped areas. On the current public goods supply: this article has developed an evaluationindicator system for the rural public goods' supply to comprehensively evaluate the supply indifferent provinces; it also employs the cluster analysis and Geographic Information Systems (GIS) to classify different regions so as to present the layout of the supply. On influencingfactors: By using the entropy method, the author has calculated the six factors that haveinfluences on the supply so has to prioritize all the factors. On social welfare: study on theimpacts of rural public goods supply on social welfare by using the QuantileRegression Method, to analyze the difference of the supply's impact on various social welfarelevels. On regional effects: besides the impacts on social welfare, the supply also hasinfluence on other regions. This dissertation has developed econometrics models on regionaleffects to carry out empirical test on this issue.Please see the conclusion of the dissertation:(1) Between1999and2009, the supply of rural public goods in less developed areas hasbeen increasing continuously. Especially, starting from2005with the implementation of thepolicies of the development of new rural areas, the reform of fiscal administration system atcounty and rural levels and the strengthening of the rural comprehensive productivity, thesupply of the rural public goods has been remarkably improved. However, large differencestill exists and increases in different regions. For instance, there are3support factors, namely,basic support factor, development support factor and the civil support factors, in the supply ofpublic goods in different less developed areas.(2) The supply has been under the influence of local resources, demographic condition,social progress, economic development, opening of the market and local fiscal policies.However, economic development is considered the most important, then the social progress,demographic condition, fiscal policies and local resources. Opening of the market is the leastinfluential. However, the difference and advantage of the influences in various regions stillexists.(3) The supply of the public goods and social welfare have positive correlation, i.e.improved supply leads to upgraded social welfare. The supply also has a changing impact ondifferent levels of social welfare: generally, basic and development support factors have largerimpact on social welfare, whereas civil factor has a decreasing impact. As for the contribution,the development support factor has the largest contribution, then come the basic and civilsupport factors.(4) Regional factor is one of the reasons of the disparity or clustering of the supply ofpublic goods."Mathew Effect" becomes obvious in this regard, i.e. the strong gets stronger,the weak, weaker. Overtime, the disparity of the supply is enlarging in regions. Therefore, theregional factor is obvious in less developed areas. The supply in one region will have animpact on that of neighboring areas via spatial autoregressive model or spatial disparity.