Study On Institutional Rent-seeking Activities Of SOEs

The relation between institution and rent-seeking is close. The substance of rent-seeking is institutional rent-seeking activities. Institutional flaws make rents exist everywhere, and the motives of rent-seeking emerged. At the same time, all kinds of the flaws of institution in the environment interwove. Therefore, rent-seeking have space to realize and the motives of rent-seeking become rent-seeking activities. At present, the efficient supply of institution is insufficient. So rents exist in great deal and SOEs are renting. So the national economy even the whole society is destroyed. The final aim to government the rent-seeking activities of SOEs is to perfect the institution construction of State-owned-enterprise. But the institutional reform of SOEs is not enough, the flaws of property rights institution, finance institution and accounting institution constitute the institutional origin of rent-seeking activities of SOEs. So the overall institutional arrangement is essential. Not only the single institution design should be scientific, but also the consistent and complement of related institution in institutional environment should be enforced. Based on these, rent-seeking space can be deduced and the aim to improve the development of SOEs will realize. The full article can be divided into six parts: Part One: The summarization on the theory of rent-seeking. First, this part summarized all kinds of explanation about the economic intension of rent-seeking. The main content includes the evolution of rents, the definition of rent-seeking, rent-seeking and profit-seeking, and the classify of rent-seeking activities. Secondly, this part explained Tullock's main thought on rent-seeking through the narration from Harberger Triangle to Tullock Rectangle. Thirdly, this part concluded the west main schools'study on the theory of rent-seeking. And at last, this part commented on the theoretical value of the theory of rent-seeking and its limitations and challenge being faced. Part Two: Basic analyzing frame of institutional rent-seeking behavior. First, this part analyzed the inherent intergrowth between rent-seeking and institution. By means of analyzing the relationship between rent-seeking and institution, the principal part of formulating institution (government) and institutional environment, this part proclaimed the emergence mechanism of rent-seeking. Secondly, this part put forward the institutional rent-seeking activities. And the institutional rent-seeking activities was divided into some different types according to the institutional rents. This article thinks that the efficiency of institution resolve whether the rent-seeking activities is active or not, and proofs the relation between institutional efficiency and the scale of rents. Thirdly, based on the analysis of rent setting, rent extraction, rent protection, rent avoidance and rent dissipation, this part revealed that the enterprises and government can constitute profit alliance easily and seek rents together. At the same time, a series of rent-seeking activities of government cause the SOEs'dependence on government in rent-seeking. Rent-seeking activities are negative sum-up games and unproductive activities distributing vested interest and it will destroy the fair competition rules. Institutional rent-seeking activities not only destroy the institution but also endangered the economy and politics seriously, because that institution constitute the frame of human behavior. Last, positive analysis to the rent-seeking activities of SOEs. This part explained the background where the rent-seeking activities of SOEs emerged, analysized the characteristics of rent-seeking activities at differentdevelopment periods in China, and concluded the general law of rent-seeking activities. Based on the current situation of Chinese SOEs, this article thinks that the flaws of property rights institution, finance institution and accounting institution constitute the institutional origin that the rent-seeking activities of SOEs come into being. Part Three: Property rights institution and rent-seeking activities of SOEs. The reform of property rights institution of SOEs went through a long period. The fact that the ownership function of SOEs is exercised by government determined the flaws of property rights, that is property rights are not clear, property rights structure is single and the protection of property rights is not enforced. So the reform of SOEs was hindered by the rent-seeking activities. The main content of property rights institution is property rights exchange, but the problem lying in the property rights exchange and regulation system, the function of property rights exchange market, the pricing of property rights exchange of SOEs decided the rent-seeking space of national assets in modern property rights exchange institution. Part Four: Finance system and institutional rent-seeking activities of SOEs. This part analysized the cause of rent-seeking mainly from creditor's rights finance, equity finance and supervise system and the rent-seeking activities in the relevant institutional arrangement. Rent-seeking in credit market is the main content of creditor's rights finance. Rent-seeking can realize because the institutional arrangement that the interest rate was controlled and the credit was allocated. At the same time, the flaws in management and administration of national bank provided conditions for rent-seeking. For the inefficiency of relevant laws, SOEs seek rents not only to government alone but also seek rents together with bank. Securities market is the market where negotiable securities publish and exchange, and its aim is to circulate long-term funds. Securities market is a certain product of people's social and economic activities. Along with the reform to the state-ownedenterprises and the foundation and development of securities market, SOEs can circulate funds through publishing stock, bond, and so on. Our securities market become the largest "rent-seeking place"because that the institution system of securities market is fumbling, the bond market is shrinking, the target enterprise going on market is regulated and many institutional flaws. For the profit-seeking and fictitious character of financial assets, financial market can create serious crises easily. So financial supervise is unavoidable. The institutional arrangement to supervise finance includes two aspects: one is to supervise the financial industry, and the other is to supervise the supervisor. This section analysized the rent-seeking problem aiming at the supervise chain: financial supervise-financial organization-SOEs. And this section explained the modern flaws of financial supervise institution of our country, and concluded the mechanism that rent-seeking activities of SOEs emerge. Part Five: Accounting institution and institutional rent-seeking activities of SOEs. The theory of accounting economic consequence explained the accounting institution's influence to enterprises and national economy. Rent-seeking on accounting institution mainly include the rent-seeking activities of SOEs in accounting institution, accounting rules'formulation, accounting policy's choice, accounting rules'internationality, and accounting information's announcing. Accounting will be inconsistent because of the flexibility, variety and selection of accounting institution. So rent-seeking is more possible. Part Six: Overall institutional arrangement and rent-seeking governance. If we want to perfect the institution of State-owned-enterprise and related institution environment through the governance to rent-seeking, the overall institutional arrangement is essential. To realize the transformation, government should rationalize its behavioral scope and construct law system and society supervise mechanism quickly. In property rights'aspect, we should reform the property rights institution of State-owned-enterprise, define andprotect property rights rationally and find efficient methods of definite property rights institution actively. In market aspect, we should perfect the market operation mechanism step by step, accelerate the reform of finance organization, improve management, promote society honest and trustworthiness. We should perfect the accounting institution system, strength the construction of internal management of State-owned-enterprise. By means of these methods, the enterprise can develop soundly. We should strengthen the construction of unofficial institution, establish institutional justice system, remodel the society value system from thinking and morals, quality of human and enterprise culture.