Analysis Of Harms, Causes And Solutions Of Administrative Monopoly In China’s Economic Transition Period

Since 1980s, administrative monopoly has been widely studied by many scholars, but there is no consistent definition of administrative monopoly in the academia. Undoubtedly, much administrative monopoly results in serious influence, including loss of social welfare, chaos of market order, etc; but, some administrative monopoly contributes much to the fast growing of China’s economy in some period. The aim of the paper is to classify administrative monopoly according to different standards so that the intrinsic meaning of administrative monopoly can be explained thoroughly. Moreover, the paper will demonstrate the reasons of administrative monopoly during period of economic transition in China, and try to make some suggestion to the problem.Firstly, the paper gives the general definition, characteristics and forms of administrative monopoly, and then attempts to classify administrative monopoly according to different standards. According to the Anti-Monopoly Law of the People’s Republic of China, the paper gives a definition of administrative monopoly regulated by Anti-Monopoly Law (we call it regulated administrative monopoly). According to the subjects of administrative monopoly, administrative monopoly can be classified into central government administrative monopoly and local government administrative monopoly (we call them central administrative monopoly and local administrative monopoly). Based on the classification and demonstration, the paper explains the connotation of administrative monopoly sufficiently.Secondly, from general administrative monopoly to administrative monopoly in period of Chinese economic transition, to local administrative monopoly in period of Chinese economic transition, based on the analysis of administrative monopoly in natural monopoly industries, state monopoly industries, competitive industries and regional economies, the paper shows the features and forms of administrative monopoly during the period of economic transition in China. And the paper does the empirical work of one form of local government administrative monopoly——regional administrative monopoly, and uses the expanded gravity model to demonstrate the effect of regional administrative monopoly on provincial trade volume, and discusses the reason for the differences among regional administrative monopoly index in different provinces.Thirdly, the paper presents the harms of administrative monopoly in period of Chinese economic transition, especially that of local administrative monopoly. From two parts of local administrative monopoly---sector monopoly in natural monopoly industry and regional monopoly, the paper summarizes the harms including negative effects are impeding the process of market integration in China, waste of resource and loss of efficiency, increasing income difference and loss of social welfare, aggravating corruption, etc.Moreover, the paper analyzes the reasons for administrative monopoly in period of Chinese economic transition from two sides of planned economy and transition economy, including views and thoughts, inertia of planned economy, remaining impacts of planned system, and the problems of economic system, political system in period of economic transition. And the paper also gives some investigation of main causes of local administrative monopoly (sector monopoly and regional monopoly) during period of Chinese economic transition by analyzing the specificity of China’s natural monopoly, magistrates’ incentive mechanism and evaluation & promotion system.Finally, according to the reasons for administrative monopoly during period of Chinese economic transition, the paper makes some suggestion to inhibition and eradication of administrative monopoly from many points of economic system, political system, melioration of financial system and evaluation & promotion system, cultivation of advanced ideology and the revolution of China’s natural monopoly industry.