Hong Fan Commentary

Author: Wu Jinglian
Publisher:
Publish Date: 2005-09-20
Features: This issue's "Theme Forum" focuses on these issues. Professor Zhou Hanhua has participated in the drafting of the "Administrative Licensing Law," so he not only understands the legislative process but also pays particular attention to its implementation. His article lists eight challenges faced since the implementation of the "Administrative Licensing Law," which actually stem from two aspects. On one hand, as a legislative document aimed at solving practical problems, the "Administrative Licensing Law" itself contains several unavoidable flaws. On the other hand, for this law with specific policy implications, the institutional environment for realizing its legislative intentions is not ideal. Therefore, the solutions proposed by the author also include two aspects: addressing the inherent shortcomings of the "Administrative Licensing Law" through legislation and legal interpretation, and meeting its external requirements through relevant institutional reforms and system-building.
Focusing on the issues in the process of legal implementation, Dr. Deng Feng pointed out several limitations of the "Administrative Licensing Law." These limitations partially stem from the law's own flaws, partially from the lack of coordination between different branches of law, and more importantly, because the internal objectives of the "Administrative Licensing Law" are not well aligned with the current governance mechanisms. For example, under the current accountability mechanisms, the power control methods designed by the "Administrative Licensing Law" are actually difficult to achieve; issues such as the division of power between central and local governments should not be regulated and resolved by laws like the "Administrative Licensing Law." A more fundamental question is whether a law attempting to uniformly control the administrative behaviors of all levels of government is feasible in terms of management and economically efficient? Regardless of the author's conclusions, we can gain deeper insights into the contradictions of the current institutional dilemmas through the observation and reflection on this case. Such thinking is clearly more valuable than any conclusion.
In his article, Professor Li Qiang explores the relationship between modern state-building and the establishment of unified political and economic order from both theoretical and historical perspectives. He points out that phenomena such as local protectionism, departmental rent-seeking, and the chaos and even conflicts in local and departmental legislation are all linked to certain characteristics of traditional states. Traditional states have regional differentiation in terms of territory but insufficient structural and functional differentiation, resulting in low autonomy. Modern states not only legally monopolize the power of violence and taxation but also differ from society in both structure and function, possessing high autonomy. Only in this way can they formulate and implement unified laws, transcend narrow local and departmental interests, and become public authorities based on public finance with the duty of providing public goods.
Professor Guo Danqing's views remind us of the criticism raised by the previous authors regarding the "Administrative Licensing Law," that is, standardizing the regulation of administrative behaviors of all levels of government may be dangerous and unrealistic. This also reminds us of Professor Li Qiang's emphasis on the unity of law in modern states. If we make a more careful distinction between these seemingly different claims, we should gain a clearer understanding and insight into the problems faced by Chinese society.
In recent years' discussions on the "Three Rural Issues," the rural land system has undoubtedly been one of the focal points of debate. Some argue that property rights are the core of the problem and advocate land privatization. Others believe that large-scale agricultural operations are the best solution to rural land issues, thus advocating a return to collectivization. Between these two extreme views, some argue that maintaining the current land property rights system may be a more reasonable choice. In Han Yu's article, under the assumption of a given distribution of interests among the state, households, and village cadres, he discusses the impact of large-scale land operations, land adjustments on efficiency and fairness, and the factors influencing land adjustment decisions. His conclusion is that the current periodic land adjustment system, although it does not provide clear boundaries for land property rights, is the best choice for the state, cadres, and households. It ensures equal land use opportunities for risk-averse households, guarantees the state's grain procurement targets, and does not violate the interests of grassroots cadres. However, an unintended consequence of the "great stability, small adjustment" policy is that it gives village cadres the opportunity to abuse their power and harm farmers' interests. Therefore, improving rural governance and preventing power abuse are important aspects of grassroots governance in rural areas.
China faces a myriad of problems during the transition period, and institutional building is undoubtedly one of the core elements. From the "Administrative Licensing Law" and the "Company Law" to the construction of the modern state, from the rural land system to the choice of industrialization paths and economic growth models, the resolution of all these issues depends on fundamental institutional building, which is inherently interconnected. The two review articles in this issue take us back to this point. One review article starts with the practice of "One Country, Two Systems" and attempts to incorporate this historically significant initiative into China's constitutional institutional building for consideration. The author argues that the practice of "One Country, Two Systems" has created a new chapter in the history of China's constitutional development, bringing rich ideological and institutional resources to China's constitutional institutional building, and Chinese constitutional scholars should take it seriously. The other article is by the late economist Yang Xiaokai. From the historical rise and fall stories of the United Kingdom and Spain, he draws a simple lesson: in the end, a country's economic success and sustainable development depend on its political and legal institutions. Those familiar with institutional economics may not find this conclusion novel, but the words of an outstanding economist who has long been concerned with China's social development at the end of his life carry profound meaning that we cannot overlook.