Research On The Legal Regulation Of Public Utility Franchise Under The Framework Of Law And Economic

The domestic academic research on public utility franchise,especially on the legal regulation of public utility franchise,mostly focuses on the operational level,and there are still some vague understandings of some basic theoretical concepts.For example,the misunderstanding of the essence of universal service of public utilities leads to the unclear definition of the connotation and the vague cognition of the extension of public utilities.For example again,although the academic circles,especially the legal circle,often mention natural monopoly for that the franchising of public utilities in economics is closely related to natural monopoly,in the process of specific research and discussion they often confuse the relationship between natural monopoly and oligopoly in the field of public utilities,and equate the franchising of exclusive nature with the special licensing of prior approval.Furthermore,the lack of theoretical research is one aspect of the problem,and the lack of interdisciplinary reference of existing theoretical research results is another.The regulation theory of natural monopoly industry in the economic circle has not been effectively excavated and integrated,and some existing theoretical achievements have not been fully considered and effectively adopted by the construction and operation of legal norms.Although the construction of legal norms focuses on and responds to the problems of fair supply of public utility products or services,the granting and withdrawal of industry franchise qualification,basic economic calculation problems concerned with price,quality,etc.,and survey problems of externality relating to environmental protection,safety,health,etc.,from the perspectives of fair distribution of output and efficient allocation of resources,the consideration and arrangement of the above operational procedures are sometimes not ideal,due to the inaccurate grasp of the economic essence of basic concepts.On the one hand,the system construction focuses on the nature of franchise contract,the dual roles of franchise regulatory institutions and the legal dispute resolution mechanisms in the legal perspective.There are long-term disagreements about the above issues,which difficultly move toward unified conclusions,so that the construction of legal norm system can not make a breakthrough.On the other hand,in practice the legal treatment of industry disputes often contradicts and conflicts with each other.The problems in signal transmission are not conducive to providing effective incentives and forming stable expectations in project operation,thus affecting and restricting the smooth development of the industry.Hence to clear up the main misunderstanding in theory,push forward the interdisciplinary reference of theoretical research results,and clarify the basic disputes in practice,so as to lead and promote the construction of relevant legal system,and effectively support,guide and guarantee the development of public utility franchise,it is urgent to strengthen and deepen the systematic and integrated research on public utility franchise.The dissertation adopts the writing style of "a big topic and then a big job",attempting to make a systematic and integrated study on a series of specific problems in franchise of public utilities.On the whole,the purport problem or core issue of the dissertation’s study is "how the legal regulation of the industry should support,guide and guarantee the development of the industry",which is also,in other words,"how to realize optimal or feasibly optimal economy designs by the legal regulation".On the whole,the purport problem primarily belongs to the type of "how to do".Obviously,studying the problem "how to specifically do" should be based on the situations of the industry projects,and give consideration to the characteristics of legal regulation.Through the research,the dissertation thinks that the development of the industry should meet the requirements of its intrinsic value goal of "giving priority to fairness,and then improving efficiency".In the study process,the dissertation has encountered six basic problems,namely,1."how to deal with the relationship between fairness and efficiency in franchise of public utilities?" 2."how does the industry practice evolve?" 3."how to carry out optimal or feasibly optimal(i.e." sub-optimal ")designs in economics?" 4."how does legal regulation guarantee the realization of the optimal or feasibly-optimal designs of economics?" 5."what is the relationship between public interest and private interest in industry-related activities? " and 6."how should we respond in legislation?".These basic problems in succession make the purport problem of the dissertation specific from the corresponding point of view,and ensure the pertinence of studying the relevant chapters of the dissertation,corresponding to the specific research conclusions of the relevant chapters.As far as the main line of overall writing logic is concerned,the research of the dissertation is always focused on the purport problem.The first part of the dissertation,namely the problem(specifically the purport problem of the dissertation)-raising part,based on the first chapter preliminarily discussing franchise of public utilities,through the second chapter investigating the overseas legal theory and practice,the third chapter interpreting the domestic industry practice and relevant legislation,summarizes the practical experiences of the industry and show the problems of legal construction,so as to elicit or raise the purport problem of the dissertation’s study,which is how the legal regulation of the industry should support,guide and guarantee the development of the industry.To solve the problem,it is needed to base on the theoretical research framework of law and economics,first to analyze it from the perspective of economics,and then to discuss it from the perspective of law.The second part,namely the problem-analyzing part,undertakes the task.In the part,the fourth chapter focuses on the research of the main economic matters in the project activities of public utility franchise from the merely-economic perspective,and then the fifth chapter and the sixth chapter discuss the legal regulation of franchise of public utilities from the perspective of law and with the further consideration of economic efficiency.The sixth chapter focuses on the discussion of the basic legal disputes in the industry.The content of the discussion is relatively independent,more in-depth and richer,so it forms a separate chapter.In fact,the content of the chapter can be regarded as the continuation of the discussion in the fifth chapter.Through the summary,the second part of the dissertation finally obtains the core argument of the dissertation.Legislation is the foundation of legal regulation.The third part,namely the problem-resolving part,which is also the seventh chapter,summarizes the theory of the construction of the industry legal system based on the research and discussion in the first six chapters of the dissertation,and under the guidance of the core argument,based on the purport problem of the dissertation’s study,puts forward the domestic legislative ideas,and finally attempts to make a draft of legislative proposals.Generally,the dissertation applies a research paradigm different from the mainstream legal analysis in the industry field,to discuss the operation and standardization of public utility franchise,mainly based on the analytical framework of law and economics.First of all,it adheres to the tradition of neoclassical economics,takes "individual rationality" in behavior and "individualism" in methodology as the research basis,takes "efficiency" in economics as the main evaluation standard,takes "cost-benefit comparison and optimization" as the basic analysis tool and goal to study economy designs and legal regulation.In addition,due to consideration of "fairness",the fair distribution of products or services is taken as the premise of efficiency calculation.In the meantime,the dissertation further uses the incentive theory,transaction cost theory,property rights theory and so on of contract economics in the new institutional economics to explore the relevant specific issues,and attempts to further analyze the behavior of public institutions,such as regulatory agencies on franchising,together with their officials from the perspective of private interests according to the public choice theory.In order to make the research more in-depth and profound,the dissertation also tries to use some research methods of game theory and topology.The research method of integration of empirical and normative is adopted in the dissertation,too.In the discussion of the legal regulation problem of public utility franchise,the dissertation mainly focuses on empirical research,especially logically empirical research,mainly to analyze "what is it actually",particularly "what is it actually" in logically empirical research,with being supplemented by normative research to take into account the discussion of "what should it be".Moreover,in the first part,the dissertation adopts as well the combining research approach of history and comparison,to summarize the industry development experience and show the problems of legal construction through historical review,and comparison at home and abroad.The core argument of the dissertation is clear and condensed,which is that,based on the situation of industrial projects,the construction and operation of law should use public and private law tools together with "private regulation" tools,as well as the corresponding compulsory and consensual means among them,to carry out appropriate collaborative regulation to form cooperative restraint rules,shape the reasonable economic calculation function,and then lead and allow the rational expectation and behavior interaction of franchising participants,to effectively support,guide and guarantee the fair distribution of output and the efficient allocation of resources in the project activities of the public utility franchise industry.In short,legal regulation should form cooperative restraint rules,and shape the reasonable economic calculation function,to effectively support,guide and guarantee the development of public utility franchise.Note that the so-called "being reasonable" here means that the shaping of the economic calculation function based on the optimal or feasiblly optimal economy design has cost economy,which generally refers to reducing the total cost,including the direct cost of regulation,through appropriate collaborative regulation to increase the net income.The dissertation holds that franchise of public utilities is a special economic phenomenon in modern society,which has its own inherent characteristics and regularities of operation.Above all,universal service is the essential attribute of public utilities,and the purpose of franchising in the specific public utility industry is also for improving the efficiency to better realize universal service,which is because the operation of such industry has natural monopoly in production cost,which means that it is the best in operating cost efficiency that only one franchisor is allowed and maintained.In addition,the franchise projects of public utilities are not only subject to universal service requirements and natural monopoly constraints,but also deeply disturbed by project externalities together with insufficient information.As a result,the settlements of the problems concerned with the grant,maintenance and withdrawal of project franchise rights,the taking-over and temporary taking-over of related projects,risk allocation,renegotiation and dispute resolution,reasonable pricing and quality assurance of products or services,environmental protection,production safety and health protection,the fair arrangement of output redistribution,and other issues need comprehensively-considering the effects of universal service requirements,natural monopoly constraints,together with project externalities and insufficient information.It is concretely found in the dissertation that franchising of public utilities is mainly carried out in the interaction and cooperation between franchising regulatory agencies and franchisees and other interest-related groups.The kind of cooperative interaction needs the help of social behavior norms to coordinate expectations,encourage cooperation and transmit signals.Law has become the most appropriate and most important social behavior standard for debugging the kind of cooperation and interaction because of its clear rules with guarantee of nationally coercive force.Therefore,according to the national legal tradition and socio-economic background,with considerations to the inherent characteristics of the public utility franchise industry,legislation should design and apply specific behavior rules to support,guide and guarantee the efficient development of public utility franchise industry on the basis of fairness.Specifically,in the context of domestic public and private law differentiation,mainly through the selection of appropriate public law management tools and private law adjustment tools,the regulation mechanism of cooperation between the two regulatory tools is designed to achieve the ideal effects of industry project operation in line with the regulatory intent.Also note that franchise regulatory agencies are often both regulators and co-operators in the franchise project activities of public utilities.The possible dual roles of franchising regulatory agencies affects the nature of franchising,franchising contracts and the choice of dispute resolution channels,and also restricts the selection and matching of different public and private law regulatory tools.Through the research of the dissertation,it is especially pointed out that the economic interpretation theory of public utility franchise should be embodied and reflected in the industry legal form.Firstly,universal service requirement should be confirmed in the industry laws and regulations as the premise of public utility franchise,and further clarified in the franchise contract.And natural monopoly is the necessary economic reason for franchise,which means that competitive methods,such as bidding and auction,should be advocated in the granting of franchise qualification to ensure the efficiency of franchise.Secondly,the construction and application of the law should make specific response by the public and private law regulatory tools to the effects put by universal service requirements of industry projects,natural monopoly,externality and insufficient information on the price and quality of products or services,and the impacts of projects on environment,safety,health and other issues.The dissertation also puts forward some opinions on the nature of franchise and franchise contract,as well as the prevention and settlement of disputes.Furthermore,from the perspective of private interests,the dissertation studies the formation,expression and realization of public interests in the franchise activities of public utilities to deeply analyze the interest interaction and will game in the relevant regulatory legislation and legal operation.Finally in the draft of legislative proposals the dissertation at the beginning takes "to implement universal service responsibility of public utilities,increase the franchise efficiency of public utilities,and continuously improve people’s livelihood" as its legislative purpose.The whole draft of the legislative proposals(a total of eight chapters and fifty-two articles)completely spreads out around the realization of the legislative purpose,and at the level of legislative consideration systematically responds to and deals with the purport problem of the dissertation and other issues concerned in the research.The prominent innovations of the dissertation are as follows: 1.it proposes that the requirement of universal service is the essence of fairness of public utilities,and the nature of natural monopoly is the basis of efficiency of franchise of public utilities;2.through analysis,it comes to the legal conclusion that the franchise contract of public utilities can be either an administrative contract or a civil contract;3.it holds that in a general sense if a legal norm not only has administrative compulsion,but also contains or further contains effective compulsion,it should belong to public law;if a legal norm contains only effective compulsion,although it is also mandatory,it should not belong to public law but to private law because it does not contain administrative compulsion.On the basis,it puts forward the views of controlling the scope,mode and degree of state compulsory intervention,and adhering to the industry legislative principle of "priority of private law,and necessary follow-up of public law;agreement first and careful use of compulsion",to build a reasonable legal protection mechanism.Meanwhile,the research of the dissertation also finds the logic and fact that the interactive game of interest groups based on private interests promotes the formation,expression and realization of public interests in activities related to franchising of public utilities,and suggests that in collective action we should focus on preventing,restraining or correcting excessively unjust,particularly illegal,wealth transfer by improper means.In addition,the dissertation also takes into account the opportunistic switching between the cooperative role and the management role of the regulatory agencies on franchising,and especially reminds us to prevent or inhibit the problem.Through the discussion of legal economics,the dissertation attempts to break the barriers between the economic research and the legal research of franchise of public utilities,and is committed to promoting the interaction between the two disciplines in this field.It is hoped that it will have certain theoretical value and practical significance for in-depth understanding of economic rationality and legal consideration of industry project activities,so as to enrich the research content,broaden the research vision,and improve research methods on the legal regulation of public utility franchise,and then promote the reasonable improvement of relevant legal system and the smooth development of industry practice.