An Analysis Of The Transaction Costs In The Public Policy-making: A Theoretical Framework

As for the authoritative allocation of social value, the public policy is always a focus of society. A scientific,democratic and legal policy is more desirable than any time before. With the development of society, high-quality public policy has become the embodiment of public opinion. However, in a political market full of interest conflict, the transaction costs are soaring, and the waste of resources is detrimental to the function of public policy, further debasing the authority of the public policy and hindering the harmonious development of the society. Therefore, employing transaction costs as the analytical tool to discuss the public policy-making process is of both great theoretical and practical significance.Based on the research results of the analysis of transaction costs in the political process, this paper attempts to build a scientific and systematic analytical framework of transaction costs in the policy-making process, in order to lay a solid theoretical foundation for specific analysis. Excluding the preface and conclusion, the thesis is divided into four parts.The first part explains the analytical tool of transaction cost theory, exploring the concept of "transaction costs" and its generalization, as well as its expansion from the economic field to the political field.The second part analyzes the composition and characteristics of the transaction costs in the public policy-making. Mainly analyzing the transaction costs of policy-making process, and identifying their characteristics, such as the interests pertinence, complexity, strong functionality and so on, so that people can have a clear understanding of transaction costs of policy-making process.The third part analyzes the cause of the transaction costs in the public policy-making. The transaction costs in the public policy-making are results of a variety of factors, this paper mainly analyzes four aspects that influences the transaction costs in the public policy-making, including the assumption of human behavior, technical characteristics, environmental factors, as well as the policy's own factor. The fourth part puts forward the ways to reduce the transaction costs in the public policy-making. By implementing an effective commitment mechanism to solve the issues of credibility in the public policy-making, actualizing selective incentive to raise the risk awareness of participants, implementing a reasonable authorization mechanism to reduce the conflicts of interests in the public policy-making, further improving the decision-making system to strengthen the construction of policy-making process, improving the information dissemination mechanism to increase the transparency of the public policy-making, as well as enhancing the supervision to the public policy-making to institutionalize the exercise of public power, these measures can reduce the transaction costs in the public policy-making.