Local Government Incentives And Safety Regulations Fluctuations

With development of national economy, the social regulation problem, including environment, safety and health, has become far more severe in China, heavy casualties has been caused by grave accidents occurring frequently, and the impact gets far more than the scope of social regulation.Without a doubt, the pursuit of rapid economic growth overly is the direct reason which causes the growing problem of social regulation, and deeper reason is the current local government incentive model. However, when people get the headache of the problems of social regulation, they can not completely give up economic growth to solve the above problems.Currently, only a few scholars have studied the relationships between economic growth and social regulation. Because of the lack of deep understanding the relationship between the economic growth and social regulation, thus it’s difficult to essentially reveal the problems the social regulation has met, that which is not conducive to social regulation system improvement, and likely has adversely affect on the stability of economic growth in a long term.On this basis, a deep understanding of relationship between economic growth and social regulation becomes very critical, and it is very important to improve social regulation system and reduce the negative impact on economic growth as small as possible currently.This paper makes no-flexibility governance phenomenon as the start point, and introduces local government incentive model to the analysis of social regulation framework, combining inadequate regulation and excessive regulation, and brings on regulation fluctuations.Based on this, we research the following questions further, first, the analysis of safety regulations fluctuations formation mechanism, second, the impact of safety regulations fluctuations on the production in the short term, third, the impact of safety regulations fluctuations on safety regulations itself in the short term, fourth, the impact of local government on social regulation system in long term. These four issues also constitute the main part of the third, the fourth, the fifth, and the sixth core chapters. Main results are as follows:(1) excessive economic growth incentives and hardening of the social stability constraint makes local government target function duality obviously, and local governments need to balance the duality to maximize benefits. Before the accident, the abiogenesis of accidents and asymmetric information between the central government and local government strengthens local government’s speculative predilection, the existence bug of regulatory system in governance provides space for the operation, After the accident, the central government’s strong intervention makes the constraints faced by local government to change, thus affecting the optimal choice of local governments. The collection of these factors ultimately leads to the emergence of regulation fluctuation.(2) To coal production, for example, the paper found that China’s coal mine safety regulations for coal production has significant non-linear characteristics. When the switching function is equal to one, of the higher impact of the safety regulation on coal production, and when the switching function becomes zero,, the impact of safety regulations on coal production was significantly smaller, furthermore the switching speed between model non-linear and linear transition is very fast.(3) To coal production, for example, the paper finds that fluctuations of the safety regulation will also affect the regulation itself. Research findings with linear VAR model shows that accidents happening earlier will inevitably lead to later raise of safety regulation, and in no other case of external influence, it which caused by this impulse will last for a long time, which shows the self-conducted making up process of mine safety regulatory system. However, Research findings with nonlinear STR model shows that coal mine safety regulations can be roughly divided into three statuses, first, below the lower threshold, second, higher than the lower threshold and below the higher threshold, third, higher than higher threshold. The safety regulation only functions well in the second statue, and don’t work in the other statuses.(4) To "melamine milk powder incident" and "lower milk standards" two case, for example, the paper found that under the current local government incentives mode the growing management trend of local government become increasingly significant, enterprise development is very important for the completion of local government economic objectives. There is a natural alliance forming between local government and enterprise, the alliance with the objective of maximizing their own benefit causes a serious negative impact on development and implementation of the social regulation system. The alliance relationship between local government and enterprise will make some link of social regulation ineffective or even invalid. Once the social regulation is difficult to constrain enterprise behavior, tendency of pursuing benefit, coupled with profit-driven market economy environment will make some enterprise get out of line, and gradually spread to the entire industry. When malpractices breakthrough limit, it forms a serious impact on social or market order completely, which will be intervened by the central government, and the alliance relationship between local government and enterprise will be destroyed in a short time. In this case, the social regulation becomes emergency management tools, and caused a huge cost for local government, central government and industry economy. Then the central government and local governments are aware that this cost is unbearable, and it has to adjust the regulation system. When the central government can not change the current incentive model in a short term, the choice was made to reduce social regulation of standards to avoid negative effect on operation of local governments, which exchange for local government paying more attention on social regulation.