Economic Analysis, The Effective Provision Of Public Goods

There exist public goods, public interests and common wants as long as there are Human society and collectivity. Public goods, as well as private goods is a must in people's lives, which can bring people with welfare, improve living standard and well-being and in the end can facilitate social civilization and progress. Empirical facts prove that public goods, like infrastructure can allow one country more productive patterns of production and distribution. In the meantime, coupled with an increase in the material wealth, the needs of health care, entertainment and gymnasium establishment, social security, public safety, equity, freedom and other common wants are gradually rising. These human-related public goods are also necessities, which can increase welfare, maintain social stability and boost development.The rise of people's aggregate demands of public goods calls for more and more public goods to satisfy. However, nowadays the general level of supply of public goods in China is still lower and structure of its supply is not too reasonable. The one of causes is that government tries to provide almost all public goods and monopolies the provision of public goods. The market failure in the provision of public goods makes it necessary for non-market mechanism, namely collective choice to provide and government is a typical form of this mechanism. But government is not always a perfect substitute. The failure to respond to the demands of public goods of people results in insufficient or no satisfaction of public goods; that is to say, government may have efficiency problem in its provision of public goods. At the same time, an unassailable fact is that market become involved in the provision of public goods with the technical progress, the change of environment and institution; Furthermore, another important force-Non-profit organization, which acts like government, is providing public goods zealously so as to meet people's needs.The theory and practice have improved that collective choice of public goods doesn't mean the choice of government; collective choice can also take the form of non-government, namely, market form or For-profit organization and Non-profit organization. On many cases, both market and Non-profit organization can efficiently provide public goods to satisfy diversified and increased demands of public goods. Most importantly, Non-profit organization not only complements the provision of government, but also supplies public goods which government is inconvenient andundesired to provide. Hence, just as non-commonable economy is an indispensable component of Market-oriented Economy; Non-profit organization is an indispensable component of supply system of public goods and social system of socialism.The theory and practice of efficient supply of public goods demonstrate that it is essential to make clear the boundary of provision and structure among government, market and Non-profit organization in order to improve their own efficiency of provision. And an efficient and coordinated mechanism must be built up among imperfect realistic government, market and society. According to economic and minimum of transaction cost principle, we must try hard to seek equilibrium of supply among government, market and Non-profit organization and establish diversification of institution arrangement and polycentric system of provision of public goods and public-private rivalship and partnership so as to achieve social optimization of supply of public goods and to meet people's needs and realize public interests.A generic regulation model presented in this paper, which analyzes influence of regulation on social welfare under different market structure, indicates that economic regulation in competitive industry will reduce welfare, whereas proper regulation of monopoly may increase welfare. Therefore a conclusion can be drawn that in competitive industry, economic regulation should be abandoned and social regulation should be strengthened and in industry of monopoly, adaptive regulation should be adopted w...