Regulation Of Adverse Selection And Moral Hazard In Urban Minimum Living Guarantee

The CPC Central Committee's Decision of Some Important Issues on Building a Socialist Harmonious Society Mentions that, we should strengthen the building of systems and maintain fairness and justice, and make them as one of the important tasks in building of a socialist harmonious society. We should strengthen the aid toward the people in difficulty as well as perfect the social security. So this paper makes the urban minimum living guarantee as the theme and talks about the management problem of the object in urban minimum living guarantee. While current urban minimum living guarantee system is guaranteeing the basic life level of poor group, it also faces how to go out of the plight caused by moral hazard. Inherent information asymmetric, plus of policy defect, all leads to the lack of coping mechanisms toward the adverse selection and moral hazard. This paper tries to analyze the mechanisms in minimum livelihood guarantee system for urban, and proposes the measure as well as find out the reasons of problem.This paper can be divided into five parts.The first part introduces research background, summary and framework.The second part introduces the theory about adverse selection and moral hazard in Information Economics, and analyzes their performance in minimal assurance, such as "false minimal assurance", "hidden employment", "lazy person in minimal assurance", and so on.The third part analyzes the reasons from theoretical and practical level. It thinks that violations in the minimal assurance can be attributed to game acts and acts of hitchhiking by rational economic men under condition of information asymmetric, as well as helplessness choices by poor who lacks of human and social capital in support. At the meantime, it analyzes the efficiency affected by target management issues.The fourth part uses the example of some developed countries as well as Hong Kong and Dalian city inland, to summarize the management experience in minimal assurance system.The fifth part proposes the "Path of Participatory Governance". And then analyzes how to avoid the adverse selection and moral hazard.The paper's main innovation is that it analyzes the problem as well as reasons of adverse selection and moral hazard in the urban minimum living guarantee with Information Economics. Following path of law-system-organization-professional -group, it proposes the countermeasures. As limit of the professional knowledge, the research method of the paper is partial characterization. And research of some problem is to be further clear.