Explain The Reasons Of Lack Of Government Provision Of Rural Social Endowment Insurance System Boundaries And System Supply

With the development of Chinese economy and the intensified aging trend of rural population, the endowment insurance system has gradually become a focus of the "Three agricultural issues". China's rural social endowment insurance system is the basis for the study in this paper. The main objective is to explore the government's role in the building of rural areas' endowment insurance system, and the division of responsibilities among China's existing five-level government (central, provincial (autonomous regions or municipalities), city and county, township and village) in providing the rural social endowment insurance system, i.e. how to determine the optimal size of the supply of government at all levels.The components of this paper are as following: the first chapter is the summary of some research work both at home and abroad in recent years, mainly consisting of the review on Chinese scholars' study; the second chapter reviewed the development process of China's rural areas' Social endowment insurance system and analyzed the status of the system, which has found many imperfections of the existing endowment insurance system for the government didn't played for its role in the system; the third chapter makes a theoretical and empirical analysis of the government's function in the providing of the endowment insurance system in rural areas; the forth chapter get involved the concept of transaction costs in institutional economics, trying to use the previous analysis of the main supply of public goods (the government and the market) as an effective tool in the supply analysis of governments at all levels, and this part, with the help of the transaction cost theory in, determines the optimal size of supply for governments at all levels.In this paper, transaction costs are the key factor in determining the supply structure of governments at all levels. Transaction costs are related to the optimal supply size of government at all levels, and therefore determines the supply border in theory for governments at all levels. But by comparison to the realities, we find that, in reality the governments' supply of insurance system does not meet the optimal size in theory, the reality indicates a supply shortage of rural endowment insurance system. The fifth chapter further analyzes the reasons for the shortage of effective supply, pointing out that the shortage of supply in China's rural endowment insurance system, to a large extent, is due to the game between central government and local governments in the endowment insurance system. In this part, a simple reward matrix is used to analyze the game between central government and local governments. Given that the accesses to the information of residents' preference of public products are the same, the levels of governments should be reduced as much as possible. Finally, according to the results of the model used, this paper puts forward four proposals for the reform of China's rural social endowment insurance system reforms suggesting that in addition to the dissection of responsibilities between all levels of government, introduce the market mechanism into appropriate areas also might be a feasible way of rural endowment insurance system supply.