Institutional Change And Performance Evaluation On New China Rural Social Pension Insurance System

With the effect of the family planning policy and the continuous extension of the average life expectancy, China's aging population trend has accelerated, and it is more prominent in rural areas. According to statistics, in 2000,China's urban and rural elderly population aged 65 and above proportion were 6.30% and 7.35% respectively, and rural was 1.05 percentage points higher than urban, by the end of 2003, the proportion of elderly population aged 65 and above in our country has risen to 8.16%.Among them, more than half are rural elderly, the proportion of which is up to 61.36%, and the inversion situation of the aging population of urban and rural will continue to 2040. Faced with such a large elderly population in rural areas, establishing and improving rural social endowment insurance system is very important. In 2009, the Chinese Communist Party Central Committee launched a new type of rural social endowment insurance system, the creating of which is a significant preferential agricultural policy to apply the scientific outlook on development thoroughly, change the urban-rural dual structure, achieve a sense of security for the majority of rural residents. As for this system, the problems of which such as the sustainability, validity, development path and so on forth, are worthy of further study.Based on the realistic background, the change and the performance evaluation of new China rural society endowment insurance system are selected as the research object, the reason of which is that the change of rural social endowment insurance system is a academic starting point to study the raising problem of the rural old-ages, also it has the basic theoretical significance in exploring rural society endowment insurance system innovation and the development. The institutional change is one kind of reaction to the unbalanced state of system, which is a substitution process of a more effective system for another system. Regarding this, this article tries to solve two problems:The first, in the course that the rural social endowment insurance develops in another system form from a kind of system form, whether two kinds of main changes motive force --How is the function way of mandatory institutional change and induced institutional change, and the two ways work independently or work alternatively each other. The second, to analyze and calculate the system performance of different stages of development, and carry on the comparison that whether the effectiveness of the new system improved than original system or not, then to judge whether the process of institutional change is a " pareto improvement ". On this basis, the countermeasure of improving the new rural social endowment insurance system can be sought and its route of sustainable development can be predicted.Rural social endowment insurance system is public products of rights and interests of ethics, based on the perspective of public finance, and combined with the principle of reciprocity, the change in rural social endowment insurance system is divided into two stages of development:traditional stages of development of rural social endowment insurance (1956-2002) and new stage of development of rural social pension insurance (2002—). Traditional rural social endowment insurance system(short title "traditional agricultural insurance") is mostly characterized by the complete absence of financial responsibility, it has gone through three stages of development:Embryonic stage (1956-1986),Exploration stage (1986-1992),Tortuous stages of development (1992-2002).The new rural social pension insurance system(short title" new agricultural insurance"), compared with the traditional agricultural insurance,the prominent change is to establish the dominant position of financial responsibility, and the system construction which is consistent with the concept of public finance. New agricultural insurance has gone through two stages of development:Pilot phase (2002-2009), the stage of local self-innovation; The stage of harmonization of policies from the Communist Party of China Central Committee (2009--)In 1965, following the establishment of the five-guarantee system, the china's rural areas had formed an elder security mode " mainly relied on family supporting, paralleled with five-guarantee system". In the collectivization period, family security is built on the basis of the collective economy which plays a potential function of social security system. After the reform and opening up, along with the implementation of the rural family-contract responsibility system, the collective security lost the economic base and the organizational carrier, at the same time, the collective potential security function was weakening. In addition, as the movement of population, the miniaturization of the family structure, the traditional family supporting for the elderly is also facing some challenges, the raising problem of the rural old-ages has become increasingly prominent and serious. This makes the traditional old-age security model and changing external environment become increasingly incompatible, resulting in a system of non-equilibrium, and become the inducement of system innovation. In the social security system of rural-urban divide, farmers cannot get pension requirements from the existing security system. In order to achieve the potential benefits of old-age security which is unable under the original system, the Central Committee of the Communist Party of China introduced the rural social basic old-age pension system of the tradition by force in 1992 according to " rural basic scheme of social endowment insurance (tried) at county level" issuing. But in pilot project and the promotion process after the system is produced, the central government still has no definite pattern and schedule, not bearing any financial responsibility either, just giving out some sense of principle instructs.All local government have strong autonomy on whether launching a pilot project and system design, and the sustainable development of the system mainly depends on peasants' system demand, which is the induced institutional change of a kind of demand. And therefore, the development of traditional rural social endowment insurance system has gone through the transition from mandatory to inductive.However, due to lack of the traditional agriculture insurance in the financial institutional defects, coupled with the low efficiency of investment management, the system can take very small or even negative net income for farmers, which seriously affected the system requirements of farmers. Peasants do not have ample demand for this system, which make induced institutional change lack main motive force, thus the system is difficult to operate and even stay cool, locked under the inefficient state. This becomes one of the important factors that lead to the system innovation in the next stage, in addition, the quickening of the process of aging population and promotion of urbanization, resulting in the weakening of security function of land and security function of family.But there is huge potential pension demand in peasants, and a survey data showed that 57.75% of the respondents expressed the hope that the main retirement way should be "receive the pension monthly". These external pressures has led to non-equilibrium systems and become induced factors of system innovation, but not necessarily lead to system innovation. Because the sufficient condition for system innovation is a certain system of non-equilibrium state that is not sustainable, only when relevant economic entities have possessed real innovative motive and the ability can the certain non-equilibrium state has the non-sustainability. To implement the pension demands of the peasants' potential, the potential benefits of institutional change, it is needed to carry the institutional innovation to increase the supply of the new system. But it is obvious that the peasants who are the subject of the demand are lack the ability of system innovation, also most local government innovation ability are extremely limited, so it is unable to break the low efficiency of traditional agricultural insurance which is under locked state. Therefore, to realize the potential of farmers within the existing system unable to implement pension demands, it is necessary to introduce more advanced and more authoritative government or group activities to force the implementation of the new system so as to increase new system supply. In 2009, the Central Committee of the Communist Party of China issued the instruction of the new rural pilot project of social endowment insurance formally, and launched a new type of rural social endowment insurance system mandatorily. However, new agricultural insurance still exist low efficiency and unfair situation, to keep sustainable development of the new agricultural insurance, we must give full play to the motive force of induced institutional change. Obviously, the change in rural social endowment insurance system is a coupling process of a mandatory system change and induced institutional change.Performance evaluation mainly carries on the appraisal to the efficiency of rural social endowment insurance system and the validity of system itself. In this regard, a performance evaluation system was constructed according to the related theories:the efficiency of the evaluation system of the institutional change and the institutional validity evaluation system. By using the productivity standard, the transaction cost standards and the consistent standard respectively from the three aspects of macro-efficiency, micro-efficiency and sustainability of the system, the efficiency of the evaluation of rural social endowment insurance system change can be carried on the qualitative examination. Evaluation on validity of the system is mainly from two aspects in the coverage of implementation of the system and the validity of security, and quantitative evaluation by four specific indexes, among them the focal point is the two indexes of joining insurance rate and substitution rate. As to this, this text mainly adopted the research methods of the economic theory combined with economic history, and introduced economic theory, metering method, precise algorithm of insurance in economic history research. It made a qualitative study on the efficiency of institutional change by according to the three efficiency evaluation standards of institutional change, and calculated the joining insurance rate and the substitution rate of the different institutional forms by the methods of metering method and precise algorithm of insurance. From three qualitative standards, it is known that the efficiency of traditional rural social endowment insurance system change is not good enough, and the new agricultural insurance is relatively much better. From the validity of the security, the first is the rate of joining insurance. After implementing the new agricultural insurance for one year, the rate of joining insurance is up to 26% in 2010,which is much higher than the maximum value of 9.65% of the traditional agricultural insurance; The second is the substitution rate. Under the same condition, the new agricultural substitution rate is much greater than the traditional.Compared from all aspects, the achievements of the new agricultural insurance system are higher than the traditional. The core conclusion of this article come to this: the change process of the rural social endowment insurance system is essentially one kind of Pareto improvement promoted by the mandatory institutional change and the induced institutional change alternately. But the substitution rate of new agricultural insurance system is much smaller than the urban worker's target substitute rate, and under most situations, their substituting rate is 30.4%, which has not reached the warning line of the rural substituting rate of endowment insurance or even failed to reach the poverty line in most situations. The situation of poor efficiency and supply insufficient still exits in new agricultural insurance system, and there is still an on-going process of change for continued repairing and improving within the framework of the system, so as to tap the potential benefits allowed by the new framework of the new agricultural insurance system. As to this, the corresponding measure must be taken to promote the demand subject of the system——peasants' demand for the new agricultural insurance system, at the same time, the initiative of local government innovation should be exploited fully. Thus the transition from mandatory institutional change to induced institutional change can be realized, and the power of induced institutional change also can be brought into full play. The main ways:strengthen the central government's legislation, planning, organizing, coordinating and other functions; Define the finance shares responsibility, improve the mechanism of investing of the government; Strengthen supervision and operation of individual account funds; Explore funding sources and innovative financing mechanisms; Accelerate the construction of auxiliary facility, break through the service bottleneck of the system; Give play to the strength of market and the society, build rural community endowment.