Analysis On The Rent-seeking With Power In Subcontracting Of Project-oriented Operations

The investment for public affairs and livelihood projects from local governments has been in overstretched situation since the tax-sharing system came into operation in 1994.To relief the financial pressure of local governments,the central government allocates special financial funds to local governments in the form of project-oriented operation,i.e.,the state authorities contract projects to local governments to maintain the public service supplies.Henceforth,the form of project-oriented operation has been an important way to allocate financial funds.and a popular mechanism to allocate resources for facilitating the public services provided by local govermments.According to the regulations and principles of the project-oriented operation management,after contracting project from central govermment,the local govermment should subcontract the project to market entities,to maximize the efficiency of public service,and to prevent government officials from rent-seeking with power and corrupting.However.the imperfections in the current project-oriented operation management raise some issues in the subcontracting process.such as manipulating with power,rent-seeking,rent-setting.and reduplicated projects,especially the rent-seeking with power and corruption in the county-level governments.These issues impede the progress of projects severely.and violate the regulations and principles.Against the background,this study focuses on the issues on manipulating with power and rent-seeking with collusion in the subcontracting process conducted by county-level governments.in order to reveal the relationships between these issues.and try to develop some countermeasures for resolving these issues in project-oriented operations.Subcontracting activities in project-oriented operations conducted by local authority departments from county-level governments are divided into two categories,the autonomous subcontracting,and the competitive subcontracting.The category of subcontracting activity is decided by the characters and the amount of fund of a project.Basically,a project with decentralized character and small fund is assigned to the autonomous subcontracting category;projects with large fund are designated to the competitive way,and the execution for competitive subcontracting activities is entrusted to the agencies such as tendering center,or the trading center for public resources.Comparatively,autonomous subcontracting is more likely to raise the issues of rent-seeking with power,and to seek greater proportion of the rent,the reason is that the discretionary power and option power are greater for employers under this situation.But.limited by the amount of fund,the rent sought by authorities and market entities is relatively small in a single autonomous subcontracting project.While considering the large number of autonomous subcontracting projects released by a county or by an authority department of county-level government,the total amount of funds provides handsome rent to seek.The competitive subcontracting activities can avoid rent-seeking with power and the loss of efficiency through exerting market competiveness.But,affected by the faultiness in the restraint mechanism for bureaucracy under highly centralized politics,and the regime for subcontracting management,also influenced by the project characters,the cultural networks,and the affinity between power entities and market entities,there are plenty opportunities for rent-seeking tnder such competitive subcontracting activities.Those competitive subcontracting activities under the cover of legitimate marketing operations are manipulated by the collusion of political powers to seek rent.Illegal activities,such as bid-rigging,colluded bidding,information leaking,acceptance violation,and collusion in experts' judgment,are considered by the reason of the faultiness of regime for project-oriented operation management.Therefore,it urges for researches on the mechanism and regime for current project-oriented operation management,to find and resolve faultiness,and crack down rent-seeking activities,in order to eliminate the opportunities for rent-seeking in subcontracting activities.