The Rent-seeking Research Of The Coal Industry Of Shanxi

Rent-seeking is the action of getting unlawful profits by using asymmetry between risk and profit, which happens because of the beginning unclear definition of the property right or the beneficiary of the property changes as the development of the economy without corresponding adjustment to the property right. The imperfection of the system construction during the process of China's system transformation produces some chance for some persons to get system profit more than their cost, which give birth to the phenomenon of rent-seeking. Rent-seeking is very popular in coal industry, one of the most important industries related to the national economy and people's livelihood. This causes resource paradox—the more and richer natural resources one country has, the slower the long-term economy develops.Taking Shanxi province, China's resource energy and heavy chemical industry base, as an example, exerting the method of combination of theory and practice, this essay analyses the detailed behaving of rent-seeking, explores its causes and its restriction on the local economy development, and tries to find the inner motivation system in the birth of rent-seeking by making a model design, further present the point how to improve the system construction to secure a proper coal property right in order to solve the development problem of Shanxi province. The main is as follows:Firstly, rent-seeking shows the government officers have the share of small coal mines, and lead to the combination of officers and coal. The officer and the coal enterprises get profit through rent-seeking, while the cost is borne by local consumer and the country, which lead to threatening of resources curse and the lingering stagnation of the economy. Secondly, the limit of the rent-seeking is that the rent-seeker's biggest lucre getting from the rent-seeking, which depends on the elasticity. The lucre of rent-seeking comes from the public property. How much the officer and coal enterprises can gain from the public property is decided by combating of both parties. Suppose the production input is fixed, the existing of rent-seeking will definitely decrease the production input of coal industry, which will result in the loss of social welfare, conducing Harberger triangle and Tullock rectangle.Finally, by redefining the coal resources property, including public property, the negative effect caused by coal resources development, governmental supervision power is increased, the governmental function as night-keeper is strengthened, then the spreading of the rent-seeking will be reduced and stopped.