| After state-owned enterprises and government organizations have experienced the reforms, public institutions have now undergone the third stages of reforms. It is by no means less important for the reform on public institutions than the former, however it has met much more difficulties, which brings high attention to the government management. Currently, our country has huge numbers of public institutions in various areas, which results in unbearable financial situations. The provided public services are insufficient and unbalanced and operations are not so satisfactory. In recent years, various reforms have conducted on the human resources, allocation system and so on, but resulting in unsatisfactory results.With the deepening political and economical reforms in our country, it has become the key to the realization of the idea of "Oriented by Human Beings" put forward in Third Plenary Session of the Sixth Central Committee of the Communist Party of China. It is obvious that no extensive, fair and efficient public services are able to provided without the system being adjusted.This paper has proposed that the goal of reform on public institutions is to establish an extensive, fair and efficient public service system in accordance with the so- called fairly wealthy society, with the help of the theories of public economics, public management, public finance and especially the public products theory. By referring to the successful experiences of public services reform in Japan and Poland and combining with our country's situations, this paper has put forward to establishing an authoritative, comprehensive and coordinated mechanism and many reforming measures to realize the separation between administrative and public institutions as well as enhance supervision on public institutions. Meanwhile, suggestions and measures on how to solve the hot issues such as "Where does money from?", "Where do people go?" , the losses of state-owned assets and so on, have also been put forward.
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