Research On Execution Of Government Regulation And Its Market Substitute Mechanism

The government would not execute the regulation system which is fixed, because the implementation costs may be too high to execute. It will trigger a new regulatory system, or ask for the government to withdraw from the area of regulation. Therefore, in this paper put forward an idea: the market mechanism, which may be a good option. The problem the paper focus on resolving is to regulate the market system implementation cost structure, and to compare cost of implementation of regulation between market and government, to establish marginal analysis model and find out the possible case, and make policy recommendations.At first this paper analyzed the evolution of government regulation, and pointed out the point of innovative research which is the cost of implementation of regulation. The second parts analyze the basic theory of government regulation. The third parts analyze the implementation of the Regulation of the cost structure in the market economy; in general, their cost structure can be roughly divided into three parts: organizational cost, the cost of implementation and supervision costs regardless of government or system to execute the regulation. Partâ…£analyzes equilibrium of cost of the regulations implementing between the government and the market, using marginal analysis, coming up the point of equilibrium of the implementation of regulation cost, and educe three possible situations. Partâ…¤, the paper analysis in different situations, how market substitute government based on conclusions of partâ…£. Finally, the paper use for reference of theory and experience of government regulation, and propose some specific ideas about government regulation reform.The government regulation is response of the market failure; its aim is social welfare maximization. However, considering in the implementation of the system cost, there may be a situation of regulation failure. This paper put out an idea of the government regulation reform, considering cost of the regulation system implementation, anglicizing possible alternative market mechanism.