Study On Formation And Governance For Social Regulation Distortion

Rapid economic growth and deterioration of social regulation are main features of contemporary China. Social regulation including safety regulation,environmental pollution etc, is always difficult to get effective treatment in China.This paper argues that root cause for regulation failure is not the system of regulation, but Chinese-style institutional arrangements. Specifically, problem of compatible between the administrative system and the regulatory system can result in regulation distortion, and regulation distortion indeed is the real issue to be solved in current China. The main research content of the article is to explore the causes for social regulation distortionin China. Social regulation system has experienced scratch process. Parallel with this course, systems of economic and political has gone from a planned economy to a market economy through gradually decentralization by the government, while implementation and impacts of social regulation will be influenced by the system reform.Essence of social regulation is the contracts with the participants of government, business, workers, and ordinary people etc. Optimal balance of the contract should result in bargaining between participants in conditions of complete information, equal bargaining powers. Reforms of market economy and institution affect processes of social regulation, influencing on conditions of optimal contract. In current Chinese institution environment, many shortcomings, such as non-symmetry for bargaining powers, non-independence for regulation institutions and non-standardized for regulatory mechanisms, are exposed for social regulation.Under current administrative arrangements, the approach for government-led market economy embodied an important role in improving the situation of underdevelopment and extreme backwardness. However, the government has controled main rights of resources allocation; meanwhile the role of the market is marginalized. The Status quo of economic and institution provides the possibility for government intervention, but also to strengthen the incentives for economic intervention. And government-led economic development provides good excuse for government to participate in production and management.Based on the cadre system, performance evaluation system requires local governments to be responsible for the higher executive.Thus, it is possible local governments make full use of the resources todo something vigorously image and performance projects and neglect public interest. Performance evaluation system is an exemplification of economic development model and institution arrangements, with which, the local government will focus emphasis on economic growth targets. Even more prominent quality is requied in current economic development, the local government preferences on economic growth has not changed. This is partly for inertia of system and behavioral, in fact, mostly stemed from the lags of political reform behind economic reform.With the Chinese-style local government competition, social regulation may be the same as monetary policy, fiscal policy, tax policy etc, become a tool for economic growth. During the government competitionfor growth, social regulation failure may not due to the government’s "inaction" Behavior, but the "aggressive" behavior for economic growth. Been Constrained by Administrative system, local government should be responsible for the higher executive,while political promotion display with fierce competition between local governments, and investment has become the main subject matter of competition.Based on the regulatory reality in China, it analys institutional environment and operation mechanism resulting in social regulation distortion, as a basis to explore the correct path to the governance of regulatory distortions. The paper is divided into seven chapters to systematic study social regulation distortion and d its influencing factors. Specifically, firstly this article considers the participating role in the regulatory process, reveals regulation mechanism from a theoretical perspective in order to deepen the understanding of the regulatory process and seek to find factors other than regulation to improve China’s social regulation problems.Then, it compares equilibrium conclusion between the decentralized regulation and centralized regulation and extends acquied the basic principles of separation of regulation. Finally, make use of the case of Foxconn; it reveals the role of local governments in China. Theoretical and empirical analyses demonstrate that local government competition, being constraint with insititution arrangements and performance appraisal system, lead to regulatory distortion.