Public Goods Supply System Reform, And Our Policy Recommendations

In the economic evolution of last twenty or thirty years, especially in the global economic reformation, market has been regarding as the most effective measure in organizing the contemporary, society. Many western nations have adjusted their controlled economy, and China is also switching to socialistic market economy.This transformation has penetrated into all sides of the society, and also has involved every field of public utility, such as government services, infrastructure, education and so on. The traditional theory, is that the government itself, including the whole process from production to provision, should plan supply systems of public-goods. And the notable character of our nation's provision system is government's regulation and monopolization by public sectors, so the market mechanism and private enterprise had rarely participated in these are as. The result is an inefficient provision and loss in public welfare. To improve the efficiency of public-goods collocation and resolve the problem on undercapitalize, it seems a trend for market to intervene the public utility. It is reported that many local governments have performed some attempts on this aspect.The mercerization of public-goods provision does not mean the governments must abandon their responsibility in this area, but they should make use of the nongovernmental enterprises' advantages for capital and spatiality to provide better public-goods efficiently. To achieve this point, the government must choose an effective method of reformation, and different schemes should be adapted to different public-goods in aim of integrating the advantages of both sides. Also the government must consummate the guarantee and supervision mechanism for this area in order to ensure the general services and protect those local enterprises by restricting monopolization.This paper is composed of The Related Theories, The Analysis of Western Reformation, and The Necessity for Our Government, The Policy Design and The Orientation of Government.In first part, related theories about reformation in the system of public-goods provision are expatiated. First, because there are few things with pure' property. and most of them can be located in a continuum scaled by exclusiveness and common consumption, sopublic-goods can also be classified and coordinated by these rules. Secondly, we discuss some theories of reformation in the provision system, including whether the government has virtual value of public-goods provision and what is the precondition if such value exists. Thirdly, we put forward the difference of provider and producer, for this is necessary in determination of the government's role.In the following part, we analyze the current system of public-goods provision in our nation. One section is used to set forth the limitations such as lack of competition and inefficient performance produced by bulwark of market admittance, exclusive in property right and illegibility between the producer and provider. Another section is used to discuss the problem in financing and investment aroused from the shortage of governmental resources.The fourth part focuses on detailed approaches of the system reformations, which is the key point. The government can take advantage of nongovernmental enterprises to change the current predicament of low efficiency. Eight classes of system arrangement are introduced, and the system reformation on infrastructure and public education is analyzed in detail. Also some feasible policy suggestions are made in this part.The last part is mainly about the analysis of the orientation for governments in public-goods provision system reformation. The government must establish regulations and rules to promote effective competition and restrict monopolization in order to construct an equitable and orderly environment. And steps must be adopted to implement a rigorous and scientific supervision on the participants.