Research On Rural Infrastructure Investments

Strengthening the rural infrastructure construction is not only a way of "Industryfinancing Agriculture, cities supporting rural areas in return" and realizing the plan ofurban and rural balanced-development, but also an important part of building a newsocialist countryside. The research on the Rural infrastructure investment can provid thetheoretical basis and policy suggestions for us to resolve the shortage of investment fundand to improve the efficiency. Based on the reviews of the domestic and foreign previousresearches and the theories of public goods, the dissertation focused on the problemsrelative to financing rural infrastructure development, analyzed theoretically the behaviorcharacteristics of rural infrastructure investments and developed the mechanism ofcompensation for investment costs. The dissertation also analyzed the public financesystem, regional economic unbalance, the dual economic structure, investmentdecision-making, capital management, etc. with Hebei data and gave somerecommendations for government agencies to make policies.The dissertation holds that the externalities of infrastructure and the government'sobjective is the main reason for the government investments. Though "government failure"make it possible for private sector to invest in rural infrastructure, their motivations are tomake profit maximization as economic men. The existing of club nature infrastructure andaltruism promotes the collective cooperation investment. The force of non-profitorganizations for infrastructure investment comes mainly from the public welfare action ofthe members of the volunteer organizations. To improve investment efficiency, thegovernment agencies must take appropriate measures to adjust the local government'sinvestment. We should also pay attention to improving the efficiency of investment inagricultural infrastructure in order to solve the problem of unbalanced developments ofinfrastructure between agricultural and non-agricultural sectors. The government agencieshould innovative ways to finance and establish a market-oriented financing strategies.Rural infrastructure investment costs compensation should follow the principles ofefficiency,fairness and environmental protection. It is a reliable and effective way tocompensate the investment cost by taxation. Compensation can be come from both directtax revenue and non- direct tax revenue such as transfer payments. Fees as a cost ofcompensation can prevent large numbers of "free riders" and provide consumers withbetter and appropriate infrastructure. Third-party contributions has its own uniqueadvantages for compensation for infrastructure investment costs through developers contribution, lottery tickets, donation or assistance etc. China should make the policiesbased on the actual situation when choosing the way of compensation for infrastructureinvestment cost.From the data of Hebei province, rural infrastructure investment take oncharacteristics such as inadequacy, structural imbalances, Diversification of the investor,correlation between the level of revenue and infrastructure investment, different demandson infrastructure investment and so on. From the point of view of the financial system, thelimited fiscal rights make it difficult for the local authority to play much more importantrole in the infrastructure construction. From the point of view of the dual urban-ruraleconomic structure, the long-standing infrastructure of the urban-rural dual supply systemdirectly leads to the lack in rural infrastructure investment. From the point of view of theregional economic differences, it is the strategy of uneven regional harmoniousdevelopment and differences of natural resources and position condition among regionsthat have decided the difference in rural infrastructure investment. From the perspective ofinvestment decisions, the traditional "top-down" decision-making often ignores the realneeds of the broad masses of peasants for infrastructure, which results in insufficient andunreasonable structures.From the point of view of capital management, it is thegovernment levels, the low efficiency in funds allocation and overlapping management thatlead to a lack of investment in rural infrastructure efficiency.Some innovations were made in my dissertation as follows:First, the financing of rural infrastructure construction was researched from the pointof view of compensation for investment costs. The report suggested that not only the initialinvestment costs but also the existence cost must be compensated with a new mechanism.Second, based on the public good theory, the behavior characteristics of ruralinfrastructure investors have been theoretically disscussed focusing on the specialattributes of rural infrastructures in the dissertation.Third, problems about collection and use of the fund for domestic public investmentsin agriculture were analyzed by applying micro-economic theories to public finance.Last, based on the survey data, I analyzed the existing problems of Hebei ruralinfrastructure investments and found the causative factors. The conclusion was drawn toprovide a theoretical reference for the rural infrastructure construction in the period of newvillage constructure in Hebei province.