A Study On The Investment In Rural Public Goods

The investment in rural public goods is a main issue for implementation of building a socialist new countryside and strategy of balanced development of urban and rural areas, and a key measure for solving the problem of"agriculture, countryside and farmers". Therefore, the study on rural public goods investment will be of help to realize the effective supply of public goods in rural areas, to achieve the goal of an overall well-off society and promote the economic and social development in a continuous and stable way. So such study not only has great theoretical value, but also gains important practical significance.This paper consists of six sections. Section 1 summarizes the findings of research on investment in rural public goods since 1990s especially after proposing of"scientific outlook on development"and strategy of economic and social development of"balancing urban and rural areas"from the perspective of rural public goods investment. Section 2 gives theoretical basis of rural public goods investment from a theoretical perspective. It systematically introduces two basic theories: public goods and public finance, which are closely interrelated and relatively independent. This provides theoretical support for the study. Section 3 systematically reviews the evolution of rural public goods investment mechanism since 1949 from a historical perspective and with institutional transformation theory. Moreover, this section also gives detailed analysis of path dependence of transition of rural public goods investment institution and deeper understanding of the path in institutional innovation. Section 4 gives an empirical analysis of the rural public goods investment from the macro and micro aspects, which provides practical foundation for innovating rural public goods investment institution. Section 5 describes the practice and experience of rural public goods investment in the United States, Japan, the European Union, South Korea, India and other countries, which can be used as reference for innovating rural public goods investment institution of China. Section 6 proposes the goal model and general idea about rural public goods investment institution in which"urban and rural development is balanced"and makes institutional innovations in five aspects of investment subjects, investment decisions, operation, financial support, auditing and supervision of investment.The main conclusions of this study are as follows: 1.Through the systematic review of the evolutioin of rural public goods investment institution since 1949, this study finds that the historical choice of giving priority to the development of industry and urban areas and the constraints of the "path dependence" lead to serious underinvestment of rural public goods within the institution for a long time. As a result, the investment outside institution is heavily relied upon, which increases farmers'burden, affects the development of rural areas, and aggravates the problems of"agriculture, countryside and farmers"and "urban-rural gap". It is also found that the top-down compulsory decision mechanism in rural public goods investment that leads to the underinvestment of rural public that does not reflect real needs of peasants.. Furthermore; it leads to the phenomenon of underinvestment of productive investments and overinvestment of nonproductive investments under the general situation of insufficient rural public goods investment. And peasants are not satisfied with poor performance of rural public goods investment.2.The analysis of historical statistical data of fiscal investment in rural public goods shows its trend. The absolute scale is continuously growing while the relative scale is continuously declining for the long term, and intensity is insufficient (although grows continuously in recent periods). It is found that the investment structure is not rational, but the historical development of shift of focus of"hardware"to"software"shows the rationality of development trend. The analysis of several typical rural public goods indicates the problems of significant rural-urban gap in public goods and serious underinvestment in rural areas of fiscal investment in public goods.3.The investigation and typical case study of peasants show that the supply of public goods in rural areas has significantly improved in recent years, but there are still some structural problems. There is more "hardware" public goods investment than "software" public goods. The satisfaction of peasants has markedly improved, but the overall satisfaction is still low. The investment in rural public goods is relatively active in recent years, and peasants are still investors in public goods of a community. The investment results have significant correlation with village-level democratic financial management. From the perspective of peasants, subject of rural public goods, priority shall be given to investment of tangible public goods (rural roads, water conservancy facilities, etc.) in the near future, but different geographic locations and topographies, levels of economy and income levels of peasants also have great influence on demands for public goods, so they should be treated differently, and differentiating order of priority shall be implemented. It is also found that villagers can effectively overcome the problem of free-riding activities in village-level investments in public goods by using good village social capital and selective incentive mechanism for their common interests. And this is beneficial for realizing effective supply of public goods in community.4.Based on practice and experience of developed and developing countries in rural public goods investment, this study suggests that the fiscal support of agriculture shall be enhanced, fiscal investment structure shall be optimized, the government's support and protection shall be strengthened. Different focus of rural public goods investment in different stages of the development shall be determined, and diversified investment shall be adopted. The public finance shall support rural finance to invest in rural public goods indirectly, which is also an important way of financial rural public goods investment in other countries. For improving performance of investment, the government's rural public goods investment activities shall be standardized.5.Focusing on the objective of innovating rural public goods investment institution, this study suggests that, with the guidance of theories of public goods and public finance, the government shall take more responsibilities in rural public goods investment and gradually establish a market-oriented and diversified institution in which development of urban and rural areas is balanced and the government plays a key role. Facing constraints of current economy and economic environment, this study designs the general idea of rural public goods investment. The"incremental economy"reform shall be carried out in steps, phases and levels and with focus to form an inherent, fundamental and lasting momentum mechanism, in which total investment grows continuously, investment structure becomes reasonable step by step and investment performance improves significantly. And the institutional transformation of"Pareto optimality"and coordination of government's long-term goals and farmers'practical needs shall be achieved. This article makes innovations in rural public goods investment mechanism from the five aspects, which is as follows. Build a diversified input mechanism by multiple investors. And establish scientific investment decision-making mechanism determined by the internal demand of rural public goods. Ensure the efficient use of investment and standardize management mechanism of investment operation. Strengthen financial support of rural public goods investment, establish a diversified rural financial support mechanism, and give full play to leverage of loans. And intensify auditing and supervisory mechanisms, build evaluation system of investment performance, and implement the auditing of performance of fiscal investment of rural public goods to improve investment performance.