Research On Contradiction Between Demand And Supply Of Public Goods In Rural Areas

With thirty years of the reform and opening up, economy of China has been growing fast. People's living standard has been constantly increasing, and harmony and moderately prosperous society construction have achieved significant results. However,'Three Greens'problem has become a vital barrier preventing further development of our country. The paper, which is guided by the postgraduate supervisor, first reviews in theory definition and classification of public and rural public goods, pointing out that current research does not emphasize sufficiently on the research of demand issues. Meanwhile, rural product demand issues directly relate to public goods supply efficiency and supply-demand equilibrium, which should be a major constituent section of rural public goods research topics. On one hand, survey on farmer demand should be strengthened, and on the other hand, one should know how to construct a new system, in order to reflect the demand in policy making.The paper consists of four chapters, approximately 30,000 Chinese characters in total.Chapter One, the introduction. We first introduce the significance of sustainable development and healthy operation, which is also the reality background of this research. Then we review the research achievements of rural public goods demand and supply in our country, including definition and classification of public goods and rural public goods, supply and demand contradiction of rural public goods in China, factors leading to the contradiction of rural public goods supply and demand, and measures solving contradiction of China rural public goods, etc. By reviewing the above, we believe:Chinese scholars have recognized clearly the supply-demand contradiction of rural public goods, and the analysis is also thorough about the causes. These are quite essential for government policy advices. However, most of the researches are superficial and theoretical, only a few studies conduct field research; also in those studies, problems of demand earn inadequate attention. Finally, we introduce the basic structure of this paper, innovation and etc.Chapter Two, general theoretical analysis of rural public goods supply and demand. This chapter contains three sections:the first section defines the main content of public goods in rural areas. It starts with review of the classic definition and controversy of public goods, and defines public goods in rural areas which is discussed in this article generally in the scope of quasi-public goods. It has most of the features of public goods:rural public goods, once completed, will be consumed by the entire village, and we can not rule out the fact that some villagers are not consumers; moreover, most of the quality and efficiency of consumption is similar. This combination of economic and social development of the rural situation, sums up to the main elements of China's current rural public goods:increasing agricultural industries and production technologies; improving rural infrastructure; strengthening rural education, health care, social security, and etc.; spiritual civilization building. Section Two reviews the classic balance of supply and demand of public goods model, such as the Pigou equilibrium, partial equilibrium supply of public goods theory and the supply of public goods in general equilibrium theory, and describes the conditions under which these theories hold and the various limitations. Section Three is mainly about rural public goods supply and demand balance of theoretical research, summarizing the theory of rural public goods research.Chapter Three, the rural public goods supply and demand study, we analyse in detail the principal contradiction of the current supply and demand of public goods in rural areas. Section One, the study of public goods in supply and demand since the founding of China, which is composed of early period of founding of China, the rural cooperatives and communes, the economic system transition, and after the abolition of agricultural taxes and fees etc. These four periods are the brief analysis of China's rural public goods supply and demand. Section Two, current study of rural public goods supply and demand. This section makes use of the survey "Research Group of Public Goods" by School of Tax, Southwestern University of Finance and Economics. The survey started from July 2009 to September 2009, two months in-depth research of rural grass-roots level. In terms of rural areas the survey covers 22 provinces and cities, including Anhui, Fujian, Guizhou, Sichuan and other places, total of 103 samples. Through the analysis of statistics of the data, we can see that within the supply of public goods in rural areas, there are several salient features. Firstly, the overall evaluation of the government and farmers on the basic supply of public goods in rural areas is average; Secondly, government rates the satisfaction of the supply of the rural grass-roots public goods higher than the farmers; thirdly, county government satisfaction scores were higher than the village, township government; Fourthly, lower income households satisfaction scores are generally lower than farmers whose incomes in general, or higher.Further it points out the main contradiction that the supply of public goods in rural areas:there are three main aspects:first of all, in terms of the rural public goods, the amount of demand and supply is not in balance. Funds for rural development accounted for the low percentage of state revenue, and no substantial increase in year-round, which contradicts the the basic concept of rural development. Such as 2010, China's fiscal revenue reached 8.308 trillion yuan, the same year, China invested 818.3 billion yuan of funds in agriculture, accounting for 9.85%. As to fixed investment in 2010, total fixed asset investment is 27.814 trillion yuan, including 3.6725 trillion yuan in rural investment, accounting for more than 13.20%. At the same time, almost all types of rural public goods supply are grossly inadequate:the industrialization of agricultural production technology is a very outdated; so is rural infrastructure, a few areas are even out of contact with the outside world; "difficulty in schooling, medical treatment and pension" in rural area will exist in a long time. Spiritual life of the rural population in general is very little.Secondly, the structure of demand and supply of public goods in rural areas is not in balance, and in rural areas, the most needed and related to the long-term development of infrastructure construction, basic quality education, rural environmental protection, rural health insurance, farmers spiritual civilization construction and other projects have the traits of long period, slow effect and other characteristics. These public goods have long been neglected by the grass-roots government, limited resources are used to build "face projects ", and demonstration plots etc., resulting in significant waste of resources, which distorts the supply and demand of rural public goods and effective convergence. Thirdly, the communication of rural demand and supply of public goods is not smooth. The "top down" form is leading the China's current supply of public goods in rural areas, therefore the leading higher-level policy makers can not fully grasp the needs of grass-roots information. Focus and target of system design will be discounted; grass-roots can not take full advantage of superior financial projects, and capital supply information can not provide long-term, forward planning of public goods in the region, in order to promote local agricultural development. From the whole society, due to the limited supply of project funds, projects between the formation of the disorder around the competition would create a lot of rent-seeking behavior; also because of limited funding, when the superiors allocate the projects, mostly they use the care of average-state arrangements. Thus top-down system can not meet the urgent needs of rural public goods, let alone for rural economic development.Finally, this section analyzes the contradiction between demand and supply of public goods in rural areas. The main causes are lack of expression of the rural demand for public goods, top-down decision-making system of rural public goods constraints, absence of rural financial fund management and so on.Chapter Four, establish a sound system of rural public goods supply and demand balance. Section One, establish a sound mechanism for rural public goods demand expression. County government needs to establish demand expression organizations of public goods in rural areas, directly facing the rural areas and farmers, and the specific needs of rural public goods charge preference survey, statistics and analysis. The responsibility directly to the county government is to play the role of staff assistant. Through in-depth advocacy and quality education, the point is to improve the effectiveness of the rural population, and the initiative is to improve the rural population in developing their awareness, actively guide the expression of the rural population and effective demand for public goods will. At the same time, the following should be managed:continue to improve the government with a system of rural primary contact; national, provincial and municipal governments establish the appropriate expression of the rural demand for public goods collection agencies; encourage the news media and objective coverage of rural realities, call on the whole community to offer advice and contribute to rural development. Section Two, establish a scientific decision-making system of rural public goods supply. County government must be established as the main decision-making manager of rural public goods, on this basis, co-ordination within the supply of public goods in rural areas should be planned in the scope of province. The most important issue is property rights, we must increase the supply of public goods in rural basic level government budget and regulation, for the development of rural areas to provide strong financial support. We believe that: China's financial capital must be used at least 25%or more directly to rural development, to provide rural public goods, and guarantee an annual revenue growth 5 percent higher than the growth rate. These funds are mainly used in protection of the financial autonomy of local government; rural public goods provision; special funds for the construction of spiritual civilization in rural areas.Section Three, the establishment of sustainable optimization of the rural public goods supply and demand balance. By building scientific rural public goods supply and demand balance assessment tools, it reflects the actual results and balance objectively of rural public goods supply and demand. This paper designs four categories to reflect the total of 15 indicators measuring the imbalances between supply and demand of public goods in rural areas. According to the results, developing appropriate measures to promote the improvement of rural public goods supply and demand to achieve dynamic equilibrium.The main contribution of this paper is:firstly, the research innovation. Public goods in rural areas are mostly from the supply perspective, few studies are on demand, and mostly superficial and theoretical. This paper is about rural public goods, and empirical analysis needs both supply and characteristics of demand expression to make recommendations. This includes:in-depth analysis of the important role of the expression mechanism of demand for public goods in rural areas, and recommendations to county government as the main provider of public goods in rural areas; discussion in depth about how to establish and improve mechanisms for the expression of demand for public goods in rural areas; and how to establish a scientific evaluation tools to further optimize the expression mechanism of demand for public goods in rural areas. Secondly, the research methods are innovative. Analysis of the past is mainly about the normal analysis, while in this paper we adopt empirical analysis, a comprehensive and systematic analysis of the economic consequences, to compensate for the deficiency of previous studies.