Analysis On China's Public Policy In The View Of Principal-agent Theory

Public policy is produced by public authority whose target is to allocate the social resources and value. It is one of the most important political achievements in modern society life, furthermore, it is a kind of significant tool and means of public administration by which the government implements politics democracy, economic development and social harmony. Since public policy science emerged in America in the 1950s, the subject has made a rapid progress owing to its mighty vitality in practice, and it has brought extensive and far-reaching influence to each country. In China, research for public policy as a discipline began in 1980s, and soon it expanded widely unprecedentedly. Along with the constant deepness of our national democracy, research for the relationship between citizen and government in the establishment of public policy gets more and more concerned.At present, China is in rapid social transformation, social problems become more complex and intense, the public policy environment has undergone fundamental changes. Government becomes more and more confused and powerless to formulate policy in the direction of public interest. From the perspective of principal-agent theory to re-examine the relationship between citizen and government in public policy, is better to realize the deep-seated reasons why the public policy stays far from public interest. And it will also provide effective solutions to make public policy more democratic, legal and scientific.In my opinion, why government choose improper means to pursue theit own interests is owing to the principal-agent relationship which is surface but material in our country. Specifically expressed in lack of citizen participation mechanisms, asymmetric distribution of information, the input mechanism of interest expression and the lack of effective monitoring and self-regulatory mechanism, which will lead to the moral hazard and adverse selection. In reality, the principal-agent problems expressed in the absence of the principal citizen, internal control problems, information distortion and corruption, which will not only cause the Government against the wishes of citizens, but also cause the serious damage to the interests of citizen, even will shake the authority of public policy. I consider that in order to effectively regulate the Government's escapades, we can impel and control government's behavior by improving the mechanism. Such as form a good communication and citizen participation mechanism, strengthen the role of oversight, establish an adequate agent market and so on, which will not only achieve a win-win situation between citizens and government, but also ensure the democratization and legality of public policy.