Public Utilities Privatization Of Government Regulation Research

Firstly the privatization of public utilities and the theory of government regulation are summarized, concluding the generation of the privatization, theory of public choice, new public management theory and the principal-agent theory in detail, highly summarized the core content of the public interest theory, the economic theory of regulation and the theory of contestable markets. Different from other areas of the economy, public utilities have monopoly, externality and public welfare nature. If left unchecked, the entry of private enterprises and operations, will lead to irrational allocation of resources; China’s market economy is not yet fully mature, so privatization will impact the existing administrative system. These ask for the reasonable regulation to the participation of the private economy in the public utilities.Establishment of a comprehensive interactive regulatory mechanism need to practice the following three aspects:The first is to establish and improve the rule of law system. Authorize in accordance with the law reasonable. Straighten out the legal relationship of the executive direction and administrative contract between government and companies.Secondly, establish of an independent regulatory agency, and safeguard the independence of the institution’s legal status, structure, operation. Strengthen the checks and balances between the regulations within the department, but also ensure the effective supervision of the judiciary, the public and media.Thirdly, it is necessary to improve the supporting construction of the privatization reform. Introduce the competition through the separation of monopoly and non-monopoly business. Establish an open and fair market access and the franchise system. Improve price hearing system to create a favorable competitive environment. Deepen the investment and financing system. Nurture and develop the third sector.