International Comparative And Empirical Study On The Economic Function Of Government

The economic function of government is important to the economic development and stability. Since the time of Keynes, there have been a lot of researches on the economic function of government. All the governments are involved in the economic management and there are great differences between the total economy and speeds of development, which undoubtedly are related with the governmental mode of economic management. Therefore, the research on the relationship between governmental economic function and economic development and stability from the perspective of governmental economic function is very significant.From this perspective, this paper focuses on the importance of governmental economic function on economic development, the differences of economic functions between different governments, and the domestic difference of our governmental economic functions. In this research, the methods of comparison, historical analysis and positive studies have been employed.The structure of this paper is as follows:Chapter one dwells on the analysis of reasons of governmental economic function from the structure of government and the source of governmental power. A comprehensive narration of the functions of government and the relationship between government and market has been performed next. Then the governmental economic function has been centered on via economic theories, managerial methods and the logic of institutional economics. The general reason of the governmental economic function is market failure.Finally, the transition of our governmental economic function has been briefly tackled. The analysis of the economic function under the mechanism of planned economy serves as a logical starting point. The process of the transition of the economic function of our government has been explored together with the analysis of the present state of affairs of the carrying out of our governmental economic function. The problems in our economic transition and the transition of the economic function of our government have been pointed out. With these analyses as a basis, the concrete content of the economic function of our government has been specified together with the means of the fulfillment of these functions.Chapter two is the international comparison of economic functions between different government. The economic functions of USA, Japan and Germany as well as their features have first been introduced. Relevant data have been compared and studied and a statistical model has been constructed according to the economic functions of governments and their economic development. This model helps analyze the relation between different governments and their economies. Then, the results of comparison and its significance for our government has been given from the analysis of the differences of the economic functions of governments. It is proposed that state intervention should be reduced, policies should be more flexible and more objectives should be targeted upon by our government.Chapter three is about the comparison between the economic functions of our local governments. An index of governmental function has been created via indexes of finance, medical care, education, currency, etc. Key variables reflecting governmental economic functions have been extracted. With the combination of governmental economic functions and economic development, a statistic model has been put forward and the methods of econometrics have been employed. The influence of governmental economic function on economic development has been exacted. The mechanism of the influence of economic growth and economic development on governmental economic function has been touched upon.Our positive studies classify our local governments into six groups. Relevant statistical models show that the cost of the execution of our governmental economic function is relatively high. The specific example is the fact that the differences between the cost of city maintenance and that of administration are insignificant. This shows that the executive cost of local governments is relatively high and their economic efficiency is low. Our classification reveals that what local governments need most is external governance and next is city virescence and environmental protection. The 1% investment in fixed asset means that our economy is till extensive rather than intensive. As a result, it is suggested that local governments should endeavor to improve their economic performance on three respects.The final part probes into the counter-strategies and advices concerning the perfection of governmental economic function. As to market failure, the macro-regulation of economic by government has been analyzed and the provision of public goods that leads to market failure has also been discussed. Methods leading to the elimination of externality have been focused too. In terms of governmental functions, we propose the objective model and the idea of a service-oriented government.As a matter of fact, research on governmental economic function is hard and the regulation of economy by governments is more than complex. With the borrowing of experiences from advanced western states and the revision of over-intervention and under-intervention, our economy can realize its sustainable development and our society can be improved gradually.