A Study Of The Problem Of The Low Efficiency Of Local Public Goods Provision In Our Country

Providing public goods is an essential responsibility of the local government departments and agencies. The problem of low efficiency in providing public goods in many districts in our country is notorious. This problem is featured by three aspects: 1) the cost of the public goods is too high; 2) the quality of public goods is too bad; 3) the deficiency and mismatch of the provision. The distortion and waste in the allocation of the social resources is caused directly by these problems. Furthermore, these problems result in the decline of the quality of public social life and the loss of the social welfare. Even worse, they retard the development of the economy to some extent in our whole country and break the stability of the society. The reason for the low efficiency of local public goods provision is complex. Part of it is due to the emphasis of equity from the local governments. The characteristics of the local public goods itself is another reason for this low efficiency. This study is based on the real situation of our country, points out and analyzes 7 major reasons for the low efficiency of public goods provision in our country. They are: 1) the lack of the restriction on property right; 2) the serious monopoly from the governments; 3) the lack of a definite evaluation criterion; 4) the difficulties in the cost-benefit analysis; 5) the asymmetry in sharing information; 6) the excess interference from the governments; 7) the low efficiency in the management of the governments. These reasons exist in the local governments in various districts, at various stages, to various extents. Solving the problem of low efficiency in local public goods provision is a systematic project. It involves the public decision system, economic system and the administration management system. In this study, a solution to the problem of low efficiency in public goods provision, which combined the experience abroad with the real situations in our country, was proposed in terms of the increase in the efficiency of decision of the local public goods, the adopting of a competitive market system and the increase in the efficiency of administration management of the local public goods. Finally, a case study of reformation in the way of public goods provision and its resulting achievement in Pudong new district was used to evidence the above point of view.