A Study Of Asymmetric Information In The Process Of Government Contracting-out Public Service

With the deepening of china’s political system and the developing of its economy, accelerating the transformation of government functions and building service-oriented government are the target of administrative reform. The effective supply of public services is essential to the transformation of government functions and service-oriented governmental building. Because of the government’s failure to offer public services, the government has to use financial resources to provide public services for the community, which are purchased from social organizations to meet the needs of the society, so as to enhance the credibility of the government. However, there are many problems in the process of government contracting-out public services, which contributes to inefficiency and wasted resources. Therefore, the research from the new perspective of information asymmetry is of practical significance to the process of the contracting-out public service the government.Firstly, based on the asymmetric information theory, game theory and principal-agent theory, this paper introduces and explores the interactive relationship between asymmetric information theory, principal-agent theory and game theory. Before the formation of the principal-agent relationship and after the formation of the principal-agent relationship, the related subjects will exist adverse selection, hiding information, hiding behaviors, etc. Secondly, the process of government contracting-out public services is divided into two stages(ex ante and ex post) based on the framework of asymmetric information theory, this paper analyzes the asymmetric information in the process of choice of agent, negotiation of contract content and performance appraisal to understand the character of asymmetric information. Therefore, we can understand why the government, social organizations and the public would make choices and behavior for their own interests based on interviews and cases as well as where hiding information and hiding behavior occur in the process of government contracting-out public services, so as to classify their motivations, such as malfeasance and corruption of government procurement staff, maximizing self-interests of social organizations, limited rationality and free-riding of individuals, etc. Thirdly, this paper analyzes the relationship of interests games between government and social organizations and individuals to classify why the phenomenon of the asymmetric information might be the case. Finally, this paper describes the solution of avoiding the problem of asymmetric information practices in United States, UK and Japan and learn from their experience, so as to provide suggestions for our government to eliminate asymmetric information problems, such as improving the legal system, building multi-channel information communication platforms, designing a fair and equitable contract and establishing a scientific performance evaluation system in order to improve the efficiency for the government to purchase public services.In summary, although the practice of government contracting-out public services continues to evolve, the asymmetric information issues are still outstanding. Therefore, the process of government contracting-out public services must resolve the questions such as "what to buy", "to whom to buy" and "how to buy" question, so that we can better rectify the problem of asymmetric information in the process of purchasing public service by government.