A Study On Governing ’Over Budget Problem’ Of The Government-investing Projects

Usual problems as over-standard, over budget(cost overrun) etc. in the Government-investing Projects, cause bad effects to the government revenue and expenditure, the government’s image and legitimacy. On one hand, department and officials in charge of the projects felt triple pressures in the whole process of the project management:complex and complicated regulatory provisions limit,coordinate the interest of construction companies and supervise pressure from the party discipline and public institutions inside and outside.On the other hand,no matter how the projects conform to the standard, how honest the managers are,over budget still often occurred,and it’s difficult to define directly responsible individuals. On the project management,public administration,public organization theory and contract economics, taking a series of government business buildings renovation projects in province A as an example,the author analyze the usual factors and control methods of the cost overrun in the PM field,to find the determining factors to over budget.After the analysis through the whole projects process as the approval,the early stage, the construction and the calculation, the author prove three important conclusions that’the government have a very strong management’,’common deceptions of construction companies are difficult to implement’ and’the conspiracy of both parties is controlled sufficiently by the internal oversight’,removed the common factors as’management capacity insufficiency’,’construction companies self-interested behavior’,’both parties conspiracy to defraud superior clients’,find three importand conclusion, first, fine PM cannot prevent the cost overrun from the demand-over control, second, the demand-over control in Government-investing Projects results from the administration system, last, institutional demand-over control cannot be governed inside the administration system.So, the demand-over control caused over budget comes from the administration system, and cannot be governed inside it, it can be defined’institutional demand-over control’.This finding reveals the root cause of over budget is not in the technology field, but in the institution field.Bureaucracy theory tells us that specialization leads to that various department of the executive authority get a professional monopoly status in their fields. This makes principals and supervisors with superior legitimate authority cannot deny their demands. As the papers can only be reviewed by a peer, effective supervision need not only legal authority but also professional authority.For the demand is the base and the object of PM, cannot be analyzed inside PM field, so the issue of demand-control is an issue that’who should propose and how to propose’. The study found that the most important difference between domestic and abroad in project decision-making and budget supervision is the role of the legislature. Decision of the NPC on the project and budget supervision is still at the level of the form, in fact, the control of the budget is inside the executive departments,without any supervision outside,which violates the basic principle of separation of powers, could not generate effective supervision. Then, the author has demonstrated that effective supervision requires a outside force with independent public base, which can counterbalance the executive department in both legal and professional fields.To match up the actual situation of China’s existing system, learning the institutional arrangement of division of powers between Congressional committees and administrative ministries in US, the author proposes a feasible institutional arrangement in accordance with national conditions, which is strengthening the functions of the NPC and its committees for approval and supervision. Reform the administration’s dominant approval system, implement the decision of the highest constitutional and the supreme supervision of the daily work of the NPC,the market’s returns to the market, non-market returns to the NPC,let the project decision-making, running, oversight of the public projects break from the inside of the administration, fundamentally construct an open, transparent and reasonable public project governance. Meanwhile, professional institutions must get rid of the control of the executive departments, get autonomy, which is an important supporting measure yet.The innovation of this paper is using a series of typical non-market internal administrative behavioral building projects as a case to study, in order to facilitate avoiding the common problems such as the government interference the market, managers incapacity in complex projects etc, in general public projects. So we can find the key variable:the users professional authority monopoly cannot be limited by the legal hierarchical authority. In turn, the author reveals a factor that there exists class authority and professional authority in various level governments, the latter conserve fairly large influence on the former.Shortcomings of this paper is limited to the construction project, the theoretical analysis is neither whole nor deep, subject to conditions the resources of the projects’ microscopic information are limited. At the end of the paper, the author discussed such three issues, the general public projects and public policies implementation actually somewhat cross,which need supervision to the executive departments,although emphasizing the division of powers, we also should see proper centralization advantage, propose some skills to design index to analyze from the gradual financial information disclosure.