Fairness And Efficiency, Balancing And Path Analysis

Can resource allocation be both effective and equitable? This is an essential question in the argument of equity and effectiveness in economics literature, which has two basic points of view, affirmative and negative. The paper is of the opinion that the substitution of equity and effectiveness reflected in reality, rather than the denial of equity and effectiveness, is the harmonious form of the both, from which the solution to the best combination of equity and effectiveness can be sought.The conception of equilibrium between equity and effectiveness is used to mean the agreement between equity and effectiveness. This agreement indicates 1) while pursuing the maximum majorization of effectiveness, each individual is equal to others; 2) the condition of equity and effectiveness when edge social cost equals to edge social benefit.The substitutive nature of the relation between equity and effectiveness in reality shows that the combination of equity and effectiveness in a given society is always diverged from the hypothesis of the maximum equilibrium between equity and effectiveness. Thus, the combination of equity and effectiveness can only be rather satisfactory, not the most satisfactory. However, a series of comparatively satisfied combinations can approach to the "best combination", hence, still equilibrative and best in combination in nature.Based on the above opinions, the paper further analyzes the six characteristics of equilibrium between equity and effectiveness and specifies the abstract conceptions of equilibrium between equity and effectiveness. The paper points out that making profits, public goods, social choice and information are the four factors that diverge equity and effectiveness from the best combination. Yet, by combination and operation of the four factors, the best path to equity and effectiveness can be found.The combination of equity and effectiveness can be classified into three categories: the high equilibrium, the non-equilibrium, and low equilibrium. The typical representatives of the three are Japan, USA, Sweden and Latin American region. The concrete combinative condition of equity and effectiveness in China is analyzed, and specific paths to promotion and solution to equilibrium between equity and effectiveness in China, as well as some basic conclusions and arising problems, are put forward.Focusing on cost-benefit analysis, the paper integrated several analyses, namely: criteria difference analysis, case analysis and standard analysis.