Economic Analysis Of Public Administration's Inefficiency

This paper analyses the Public Administration's inefficiency from all directions, and puts forward the measures of improving administrative efficiency. First of all, the paper probes into the concept of administrative efficiency, differentiates and analyses the macroscopic and micro efficiency, and points out the research overview of administrative efficiency and development trend. Secondly, the paper probes into the origin cause of formation and phenomenon of Public Administration's inefficiency in terms of economics. Public Choice theory uses the concept of " economic man " to analyses all public persons (voter, politician, bureaucrat, etc.). Regarding this as the basic point, a political platform is simulated as a market in an economics meaning, and the theory analyses individual's response to different decision rules and collective system on the political market, so as to analyses the origin cause of inefficiency of the public administration. The Principal-Agent theory is studied how the client designs a optimum agreement to offer the reasonable remuneration to attract, encourage the agent and carry on the supervision and restrain to agent's behavior in case of information asymmetry. Through the description of the operation structure of agent of the public right, the paper analyses the responsibility relation between the political client (voter) and political agent (the politician and bureaucrat) theoretically, and points out the omission of supervising and working to agent's incentive mechanism is the important origin cause of Public Administration's inefficiency. Using the concept of "Transaction Cost", the transaction cost theory probes into the relationship between transaction cost and governance structure such as market, hierarchy, etc. And through making discussion to limitation of the hierarchy system, the paper analyses the cause of public administration's inefficiency. Finally, the paper analyses the current situation of our country's public administrative efficiency, points out the methods and ways to improve of the public administration's efficiency of our country.