The Thinking On The Reform Of Public Institutions From Public Finance Perspectives

Public institutions are crucial organizations that were mostly formed in traditional administrative system. Public institutions are the main providers of public services and the "Public Institutions" is a general term for the various units that subordinate to public institution system. The Public institutions formed in traditional administrative system are numerous and complicated, involving various trades and holding many tremendous differences in social attributes and social functions. Objectively speaking, public institutions had played vital role in promoting society development, while they have been criticized by the whole society these years for the contradiction between the heavy government financial load and the deficiency of public service input, chaotic functions, bloated organizations and the deviation of public welfare objectives with the development of society. Since the public institutions cannot meet the social development, many provinces and cities had been exploring the reform road. In2001, Central Committee had issued Guidelines to Classification Reform of Public Institutions accompanied by other nine related documents, which had clarified both overall objective and phase objective providing the specific reformation thought.The essay focuses on the reform of public institutions in a unique perspective of public finance and tries to give some public financial suggestions and measures with the help of economics and public finance theories to achieve the phase and overall goals.The paper illustrates in the following five parts:first, this part has introduced the reform background and made a comprehensive review of both domestic and foreign literature; second, this part elaborates on some basic definitions, features and classifications of public institutions and makes a review of history reform of public institutions; third, this part puts forwards three objectives of the reform based on the theory of public goods, externality and multi-center governance theory; fourth, the paper analyzes the existing malpractices and problems in public institutions, which make it necessary to reform, and then elaborates on the specific difficulties of each kind of public institutions as institutions with administrative functions, institutions operating commercial businesses and institutions engaging in social services during the reform process; fifth, this part gives some public financial suggestions including the financial support from financial departments of the state, innovation of financial supply, financial policies and enhancing financial management.The paper holds the view that the essence of the reform is a process of rebuilding relationships of government, society and market. The reform of public institutions is not an easy reform that just solves existing malpractices, but to achieve the goal of improving the whole society’s welfare and establishing a new multiple social welfare supply pattern and a service-oriented government. In the process of the series of reform, public finance plays an important role, which not only provides financial support but also helps public institutions change the ways they run through the innovation of finance supply modes and make them back to the objective of public welfare. The employment of a series of appropriate public financial policies can help lead the reform. Financial budget system, separate management of income and expense, management system of state-owned asset and perfect supervision system guarantees the reform of public institutions. Besides that, the reform of public institutions is not an independent reform but needs the help of many other related reforms such as endowment insurance system reform and personnel system reform to achieve the goal smoothly. Only under the combined effects of public finance, endowment insurance system and the personnel system, can the public institutions accomplish the goal of classification reform of public institutions and establish the new social welfare system gradually with the improvement of social service supply and the sound development of society.