Market Mechanisms In The Process Of Public Goods Supply

The economics thinks, due to "free-rider" problem and performance revelation problem caused by the characters of the public goods, Government has more economic efficiency than the market in providing public goods. So in the practice, Governments generally adopted vertical integration has long been the way and supply public goods by monopolized production. However, results shows there's not only high cost, low quality and inequality, but also "compulsory consumption" problems, consumers are lack of necessary choice under the environment that governments provide public goods by monopoly means. Aiming at the above problems, the public choice theory and new public management theory put forward their opinions that it should break the monopoly of the government and introduce market competition mechanisms in the process of public supply has increasing been accepted by many countries. In resent decades, developed countries and most developing countries implemented all kinds of market-oriented reforms, their experiences from the practices shows market mechanisms can improve to a great degree public goods or service supply efficiency and effect.This paper focuses on the supply mechanisms innovation in the supply process of public goods and service and its important significance for improving public goods or service supply efficiency of and social equity. On the basis of above analysis, the paper studies on institutions design, model selection, and the development and use of all kinks of marketization tools in details based on the national conditions and public goods or service supply situation in China.The full text is divided into five parts excluding introduction.Chapter 1 is the section of the theoretical summery and assessment of relevant researches. It mainly combs and reviews the related domestic and foreign economists'research literatures on characteristic, classification, supply way and supply efficiency of public goods. And it has targeted a brief assessment. Chapter 2 is "a new study on public goods theory". On the basis of previous research results the author broadens the knowledge about characteristic, connotation of public goods and reclassify of public goods according to research needs and our nation's conditions. And it gives necessary theoretical groundwork to next chapter' study on conditions and institutions arrangement of public supply efficiency.Chapter 3 mainly studies two problems, one is necessity, theoretical and practical basis, and conditions for the introduction of competition mechanisms in the process of public goods supply. The other is institutions design on how to introduce competition aiming at different type of public goods.Chapter 4 focuses on model and method on how to introduce competition.in the production of public goods. The results shows that supply efficiency and social equity can be improved greatly by introduction of market competition mechanisms so that the public goods can be provided on a competitive basis. But it should be noted that improved levels of efficiency and equity is depend on to some extend government's management ability of public goods supply by market-oriented approach including governmen's accurately grasp the extent of application of different marketization tools, market-oriented program design, the choice of the specific market-oriented approach and related operation technique.Chapter 5 focuses on how to introduce market mechanisms into the supply process of public goods supply in China. The author first analyzes the present situation of supply and demand of public goods, and illustrates that there's urgent need for China to promote market-oriented reforms in order to improving government's ability of public goods supply and relieve contradictions between supply and demand on public goods. Secondly, the author analyzes basic situations, effectiveness and major problem of market-oriented reforms have been carried out in China, etc.. Lastly the author delves into related policy and path selection of market-oriented reform I the process of public supply according to our current constraints.Main innovation of this paper lies in the following aspect:first, the author expands understanding of public goods and its supply on the basis of previous research results. The author thinks that the supply of public goods actually contains two layers of content:one is the supply decision-making of public goods which makes choice through the political process. government At this layer should solve such several key problems as whether or not to supply the public goods, its quantity and quality, as well as how to production and how to allocation. Therefore, the government's decision-making itself can be viewed as public goods,because government has both the basic advantages of efficiency and fairness in terms of supply decision-making of public goods. Secondly, solve the technical problems that how to transform public resources into public goods consistently and effectively. Generally speaking, enterprises have efficiency, technical and managerial advantage in the production. Therefore, through institutional innovation and the introduction of market mechanisms in production or management process in the public goods supply, government and market mechanisms can play the comparative advantages and avoid their weaknesses effectively, two major goals of supply efficiency and equity of public goods can be better achieved.Secondly, make a study on significance and internal mechanisms for promoting social equity market mechanisms introduced in the process of public goods supply. Existing research into market mechanisms introduced in the process of public goods supply focus on its role for improving the economy, efficiency and effectiveness(for short "3E", but,the research into how to improve efficiency while promoting social equity is ignored. Equity will be an objective as important as attention in this paper, Through the democratization of decision-making process, the preferences and will of the majority members of society can be better reflected。By choosing different forms of marketization, such as "contracting out", voucher combined with financial subsidies and other forms of relatively complete contract design, etc., both equity and efficiency could be achieved, thereby,"4E"goals will also be achieved eventually.Thirdly, Studied in detail several important technical issues:first, make classification of Chinese public goods according to national situation in China as well as supply and demand of public goods; secondl according to our existing constraints:market imperfections, unsound legal system, lack of government capacity, the author studies institutions arrangement as to how to introduce market mechanisms into different kinks of public goods; last, make a study on institutions optimization and measures improvement on how to vigorously promote on the basis of combination of efficiency and equity, principles of control and supervision. Follow-up market-oriented reforms in China, at the strategic level, Should be conducted the unified plan and system planning; at guiding thought level, should enhance the government's responsibility and strengthen the government's accountability system; at the technical level, should improve the operational capacity of the government. Problems and conflict in former reform can be avoided, efficiency and equity of public goods supply can eventually be improved, therefore the needs of people can be better met.But, it should be clear is that the study on public goods supply through market-based approach needs multi-disciplinary knowledge, such as, politics,constitutional economics, science of business management, sociology, philosophy, ethics, which needs extensive accumulation of knowledge and good analytical ability to integrate and summarize, this is undoubtedly also a great challenge in this paper. View of the classification of public goods and appropriate mode of supply, theorists there has been a subjective, even arbitrary knowledge. I could not escape such suspicion. Because related countermeasure studies is even more complex that it is difficult to make an intensive and conmprehensive study of it. I can only work at it and inevitably leave some regrets. In addition, effectiveness on public goods supply by market-oriented method is relatively easy to analyze from the perspective of qualitative, but, there is great difficulty in quantitative analysis. Mainly because of reform to introduce market mechanisms in the process of public good supply in China is just beginning. In the central government level, reform has not been promoting on a large scale. Therefore, reform is relatively small and is still in the exploratory phase on the whole. The effectiveness of the reform is difficult in a short time to conduct a comprehensive assessment, these shortcomings can only be in the follow-up study.