The Income Distribution Effects Of Administrative Monopoly

With the development of thirty years' reform and opening up, China has become one of the most driving economis in the world. Both the riseing of income level and the improvement of poverty were the fruits of this time. However, the benefit of economic growth was not equally halved by all the people, the problem of income difference enlargement almostly went with the GDP and income growth durinig all the reform period, and became even much serious. In recent time, the income distribution effects of administrative monopoly became a crucial source of inconsequence income gap, and because of its complecting with interindustrial, urban-rural, interregional, individual income difference, in addition with the lack of powerful administrative departments' institutional reform and income distribution policy regulation, the enlargement of income difference by administrative monopoly became more serious. So this paper intended to discuss the topic of income distribution effects of administrative monopoly based on China's experience. Under the analys of the forming machanism and history of income gap, I studied the administrative monopoly's effect on wage an non-wage income difference's, its modality and influence, and then the institutional choice on the controlling of income difference enargement. After this research, I expected to have some conclusions on the income distribution of economic transform countries, and the objective judgement of the income distribution effects of administrative monopoly. These would be helpful to the efficiency of the income diference enargement's management, and enrich the theories of income distribution.Firstly, I defined the conceptions used in the paper and review the literatures on the topic, the theoretics will be reviewed by analyse depth and logic consecution, the demonstration researches were reviewed by the development of demonstration theory, econometrica model and regression data, and their application in China was also summarized. Then I discussed the history of income distribution effects of administrative monopoly in China, based on the ownership change, administrative monopoly transition and the evolution of wage and non-wage income institution aftier 1978. These helped me to analyse the causation of income distribution effects of administrative monopoly in special period and the root of nowadays' income difference enlargement.Secondly, I uesed a two-departments-profit-distribution model to study the theory of income difference by administrative monopoly, discussed the income dristribution effect of monopoly profit distribution, price and quantity monopoly of factors and products, and analysed the incentive distortion under administrative monopoly. I found that the rising of administrative monopoly would enlarge income difference of the workers, the mamagers and the average income in different departments, when the government intended to maximize its economic benefit, the problem of income difference enargement would become even more serious with the increase of administrative monopoly. Beside this, more opportunistic behavior would occur in administrative monopoly departments because of the attainability of low-cost financing, the insiders would gain much profit in the form of non-wage income, or the departments' managers would enjoy high level on-the-job consumption, these all enlarged the between and insider non-wage income gap. The government's intervention of labor distribution also enlarged the income difference, and the more important of the government's economic income target compared to the full employment aim, the more severe of income distribution problem. There was a "impossible triangle" in the distribution effect of the administrative monopoly, namely the three aims of income gap reduction, emplyoment rate raise and gross income growth would not realize at the same time under administrative monopoly, the breakthrough of this situation called for the reduction and elimination of administrative monopoly power.Thirdly, the fifth charpter gave some demonstrations of administrative monopoly's effect on wage and non-wage income distribution. This charpter used two step regression and Z-score model to study the wage distribution effects of administrative monopoly, discussed the mechanism and degree of inter-industry wage gap by administrative monopoly. The wage distribution effects of administrative monopoly was very distinct, the big scale and high level administrative monopoly industris have high wage level, and the effect merged with economic monopoly even enlarged the wage gap. The wage distribution effects of administrative monopoly were all square with the human capital and other factors. The non-wage income distribution effects of administrative monopoly was discussed using the tracing panal data model and logit model, the administrative monopoly effect's scale and mechanism was analysed based on different departments' bonus, allowance, aubsidy, work intensity and medicare. I found that the difference of non-wage incomes were the crucial causation of difference between administrative monopoly department and other department. Although administrative monopoly department's wage predominance was not remarkable, the non-wage income was much favourable in it. The non-wage income equation indicated that the institution of non-wage income distribution was nonstandard in the labor market of China, the education level, working expperience, ability or the occupation characters would not determine the non-wage distribution, but the administrative monopoly power of the department was the main factor. Compared the two incomes' distribution effects, I found that the administrative monopoly's distribution effect was higher on non-wage income, truck, health income or other nonmonetary incomes, the non-wage income distribution institution was much nonstandard than wage income.Finally, I analysed how to manage the income distribution of administrative monopoly and settle the problem of inconsequence income gap. The policy should reform the wage and non-income distributions in different kinds of administrative monopoly departments, reduced the effect of administrative monopoly power on income distribution. The policy should not only broaden the human capital return, but also reduice the inconsequence income gap between different departments. The income structure's optimization should include appropriate ratio of wage and non-wage income, the increacement of the income items' explicitness, standardization, competitory and its encouraging function. The policy should also establish the management mechanism between the price of administrative monopoly product and the increment of administrative monopoly department's capital; prevent the problem of income gap by the welfear depression effect of administrative monopoly department. In the long-range, government should set up an industry income management system, establish a inter-industry-comparative basic wage and non-wage income distribution system based on labor position estimate methods and unitive human capital appraise system. The taxation's converse modulation and tax dodging should also be regenerated, the govertment should establish a long-term effective control system to supervise the administrative monopoly department's income distribution all-round, and effectively integrate the government's dual role of market participator and supervisor.