The Research Of Public Goods Supply Pattern In Small Towns Around Metropolises

The essence of urbanization is the transformation of agricultural migrants’ production and lifestyle while the core remains “urbanization of human”. Serving as the foundation of this transformation, the supply of public goods propels the “urbanization of human”. Such impetus has been testified in existent literatures, but the samples seem confined with rural areas. In addition, proving the feasibility of public-private-partnership(PPP) in public goods supply, the existent literatures have discussed on the difficulties of PPP, without a feasible improvement figured out. Thus, this paper selected transitional areas with higher level of urbanization-- towns around metropolises, as the object of research. Taking Baoshan District in Shanghai as an example, after analysis of the current state and difficulties in public goods supply, this paper worked out an improvement model, which was then specified as a feasible strategy for some certain public goods.Firstly, researching the current state of public goods supplied in the sample area, an assessment index based on analytic hierarchy process(AHP) was established to assess the level of public goods supply in Baoshan District, from dimensions of infrastructure, education, culture, health and environment. Then the paper researched the factors influencing the level of supply in the sample area. The correlation between comprehensive variants and the level of public goods supply was testified, with the observed value of household amount, migration rate, industrial output value, private sector tax, local government revenue and per capita disposable income. The result of econometric analysis indicates difficulties in public goods supply in sample areas as below: A) there is foundation of PPP of public goods supply in the towns around well-developed metropolises, but the rate of private sector’s participation is quite low; B) the level of public goods supply remains a positive correlation with citizens’ affordability while the supply reacts with a significant lag towards the change of migration.As to A), considering the asymmetric information background, this paper set up a Bayesian game model to prove the adverse selection in current PPP and suggests that intermediate organizations help improve such situation. Furthermore, comparing with international successful experience, it is suggested that the intermediate organization consist of consumer and those with expertise of the certain public goods so that the problem of adverse selection will be solve and incentive compatibility between intermediate organization and ultimateconsumer will be reached. Besides, a set of European call and put option is proposed tentatively, in order to share the risk and to stimulate the intermediate organization.As to B), taking the widely constructed public housing around metropolises as example, this paper insists to research the varying property of public goods in the dynamic process of supply, which challenges the static perspective of researching public goods as existent literatures did. It is advised in this paper that the regional externality of public goods be improved by internalization and the amount of supply be increased to guarantee the public interest.To sum up, analyzing the public goods in small towns around metropolises, this paper puts forward a tentative path of improvement to the supply of public goods: to keep increasing the supply of public goods in small towns by PPP as improvement of the basic living condition of local inhabitants; to introduce the intermediate organizations comprising experts and consumers into supplier as solution to adverse selection, in order to upgrade the quality of small towns and standards of living.