Improve The Incentive Mechanism In The Public Sector Of Our Country

Principal-agent relationships are a kind of normality in modern society. The public sector of our country is among the net of principal-agent relationships. Their actions are regarded as under the frame of this intricate net. "Employees generally lack professional dedication and their working-efficiency is very low, and it is an urgent problem to be solved in the public sector of our country".The theories of principal-agent indicate that when there appear principal-agent relationships between the employer and employees in one organization, the key of improving working-efficiency is to improve the incentive rules in organizational management. That is to say, build series effective incentive rules; to encourage each employee in the process of pursuing the goals of them achieve the objects of the organization. The essence of the agency problem is to design the mechanism of the incentive rules. Incentive scheme is the key issue in the relationship of principal-agent. I think that if only there are principal-agent relationships, the key to design mechanism lies in the characters of principal-agent relationships. It is the entrance to resolve the problem of principal-agent relationships.The theories of principal-agent used in private sector have gained great effectiveness. So, I put the problem of encouragement in the public sector of our country under the frame of the theories of principal-agent .On the base of analyzing the theories of principal-agent in the private sector, firstly, I put forward the frame about incentives mechanism. Then, I analyze the character of Agency problem in the public sector of our country. Further, I catch the reason that the incentive mechanism is pool in the public sector of our country and probe into the public sector's incentive mechanism of our country and operate the invalid origin. In the end, I put forward a radical cure inside and a treatable cure outside to improve the incentive mechanism in public sector of our country.