Research On The Rural Credit Cooperative, Agricultural Credit Paradox And Governance Structure Transition

It has occupied a position as "main force" in the rural financial andplayed an important role in support of development for the "three ruralissue" since the establishment of Rural Credit Cooperatives (RCC). RCCwill be divided into three stages since the founding of our country in thisthesis. The author will identify governance concerns, reveal formationmechanism of agriculture credit paradox under the distorted governancestructure and put forward relevant suggestions about improvinggovernance dilemma of RCC through intensive research.This article points that the reason why RCC can’t return to nature ofthe cooperative financial is the involvement of national power. Thenational power became the real masters instead of commune member’srepresentative assembly from the birth of China Rural Credit Cooperativesto the process of reform and development. Just because of this, thegovernance structure which belonged to RCC as financial institution wasdistorted. RCC was endowed dual utility function after the distortion ofgovernance structure for RCC. The first was to seek the governmentbenefits maximization, and the second was to achieve social welfaremaximization. But for the controller of RCC, the first objective was moreimportant than the second target. As a result, RCC which should providemembers with services deviated from the interests and needs of itscommune members and emerged the agricultural deviation phenomenon. This is the "agriculture credit paradox". In order to solve the problem ofagricultural credit paradox, this thesis starts from the perspective ofgovernance structure, then analyzes the reason of the agricultural deviationphenomenon about RCC.It will be divided three parts in this thesis. The first part describes thegovernance status of RCC and points out the problems in the developmentprocess; then elaborates the problem of "internal control" and dilemma of"outsider intervention" about RCC, at the same time explains the relevantinterest groups which influence the development of RCC by game theory;at last analyzes the principal-agent problem about RCC under thegovernment intervention in order to find possible ways to reduce agentcosts. The second part divides RCC which has grown since the foundingof China into three periods, in order to seek the production mechanism ofagricultural credit paradox and addresses its form of expression. The thirdpart will crack the paradox of agricultural credit as a logical starting pointof governance structure transition about RCC, and points out the transitionpath and mode selection in order to solve the main problems in theframework of corporate governance which was built by reforming.