Causes Of Chinese Food Safety Governance Failure:Static Game Analysis

Why does food safety problem in China cannot be solved effectively for a long time? China has initially formed a set of food safety supervision laws and regulations, especially since2008, to strengthen the food safety supervisory control and improve the regulation efficiency, the government conducts a series of drastic reform in terms of organization, production safety liability system, monitor means, agricultural product certification and accreditation system, food safety and quality standards and tests. But it turns out that the food safety incidents still happen frequently everywhere, even in the f well-known enterprise. The purpose of this article is to explore the abnormal phenomena from the perspective of economics and its conclusion as follows: the direct influences to central government regulatory decision are mainly driven by the tax losses, trade losses and ruling authority; the direct influences to local government supervision decision are mainly driven by regulation direct costs, corporate bribery, the cost local government punished when unsafe food goes into the market, and fixed net income; the direct influences to business decision are driven by the cost and the benefits of producing unsafe food. The defects of law mechanism design about above mentioned direct factors in China lead to both the central government and local government lack incentive, which is about high frequency in the implementation of food regulatory policy of in food safety. The central government, the local government and the food enterprises all have higher expected payoff about the trade of unsafe food. So it leads to food safety governance failure.This paper use static game theory. It must be said that, the dynamic game theory better suits the research of regulatory problem, but there are two main reasons for the paper having a preliminary analysis by static game theory:first, the modeling solution of dynamic game in this field is very complicated; second, both food safety management policy and legal basis of China are relative stability since the end of2010. Using dynamic game theory to analysis regulatory problem of food market is the next research direction, not in this paper.In fact, all countries are actively looking for effective method to control the food quality. Because consumers’requirements to food safety are improving and food safety management the causes of food market failures are complicated.food safety problems is a hot issue in Economics since the early1990s and obtains many meaningful research fruits. But the literature review’s findings show two problems: the one is the majority of foreign literatures’objects are developed countries, under the condition of the related researches in China is later than foreign countries, the other is the most of the research is confined to the comparison of food safety systems in different countries and the technology on testing standard and method with relatively complicated research methods(such as Interest theory, the principal-agent model or evolution game theory). So this article works with China’s food safety legal governance mechanism by static game theory to find a simple way for explaining clearly food safety government failure.