Seeking The Balance Between Equality And Efficiency

The question of privatization to the government utility from the study view of the equality and efficiency is worth reserching because of its immediate practicing instructiveness as well as important theoretical value. As known to us all, public goods is an important tool for public demands and maintaining public interests, while the government utility is the main sector for supplying public goods. The traditional institution arrangement leads to the dilemma of the equality and efficiency when the government utility grows and develops. But why? Because those enterprises which are controlled and managed by the government itself lack adequate market incentive, making efficiency inertia of the government utility increase gradually. Worriedly, The government's surging acts will lead to fundamental faults on efficiency when the accumulation of the inertia exceeds certain limitation; moreover, there may be big difficulties in making up those faults. In order to realize incentive compatibility of the equity and efficiency in the realm of the government utility, and to accomplish good governance of the government, privatization which is a newly-increased tool comes out in the tool-box of the government' s public policy. The successful development of privatization to the government utility means that the equality and efficiency inter-grows at the same direction, and, the base of inter-growth is depended on whether the privatization to the government utility possesses three fundamental pre-conditions, which is respectively called political pre-condition, economic and valuable pre-condition. That is to say, the balancing of the equality and efficiency is the political pre-condition of the privatization to the government, positive-sum game with private economy, the economic pre-condition, and good interact with governace of the government, the valuable pre-condition. Meanwhile, the market-oriented quality and the adequate competition of the government utility make up its internal and external limitations. Therefore, five dimensions of privatization to the government utility are composed of three pre-conditions and two limitations. Only when those dimensions are basically at the same direction, does privatization that is a tactic to accomplish effective governance of the government apply to practising realm successfully.