Role During The Economic Transition Of Government Functions

In the transition from planned economy to market economy, government and market are the two channels or systematic arrangement in the realization of resources allocation. Market enjoys the advantage in optimizing the resources?allocation, but it itself has drawbacks, which requires plausible interference and regulation from the government; on the other hand, government can compensate for the drawbacks of the market, ensuring stable and consistent social and economic development, but such a function should be restricted in reasonable ways. Otherwise economic development and the market-oriented reform will be suspended. So how to specify the functional role of the government in order to follow the market principles is one of the rather significant theoretical and practical subjects during the economically transitional period. This paper has employed some of the basic analytic methods in economics, such as demand and supply balance analysis, cost income analysis, universal selection theoiy, etc., on which the following points are analyzed concerning the socialist market economy: the governmental demands, functional orientation, policies and measures. The purpose of doing so is to provide some theoretical support for the role shift of the governmental functions. The paper includes four sections:At first, an economical analysis of the governmental demand and supply. To offer a reasonable scope for the governmental supply by means of demand and supply balance model and cost income analysis. Second, with regard to the government's role displacement phenomenon and the corresponding problems in the economic transmission period of China, by means of universal selection theoty, to analyze the causes of the role displacement. Third, on the basis of Section two, to conduct normative analysis about the functional role orientation of the government, and propose general functional roles and system innovation functional role . At last, the measures and channels to transform the governmental functions and rationalize the role acts of the government.