Economic Research Library · 16 Transformation. Development and Government

Author: Hu Jiayong, Editor-in-Chief
Publisher:
Publish Date: 2003-02-01
Features: This book combines theory with practice, offering an in-depth discussion on the transformation and repositioning of government functions during China's economic transition, as well as the role of the government. Its distinctive feature lies in its comprehensive exploration of the theoretical perspectives on the "effective government." The book consists of 16 chapters, covering topics such as price mechanisms, government and food security, government functions and commercial systems, analysis of government revenue structures, government expenditure structures, monetary policy analysis in transitional China, reforms in the social welfare security system, the role of the government in economic development, government and regional economic development, rent-seeking and corruption.
The essence of economic transformation is government transformation. In microeconomic areas, the government should shift from being a price setter to a regulator of price behavior, allowing prices to reflect their true nature. Regarding food security, the government should avoid acting alone and fully leverage the active roles of markets, grain merchants, and farmers. The government should withdraw from general circulation and take on the role of a guardian of market order. In macroeconomic areas, the government should use fiscal and monetary policies to create a stable and balanced economic operating environment. To achieve this, it must reform micro-financial institutions, strengthen the independence, authority, and decision-making scientificity of the central bank, establish an effective monetary policy transmission mechanism, and enhance the effectiveness of monetary policy. The government should transform its revenue and expenditure behaviors, establishing a unified and standardized structure that aligns with the market economy and policy functions. In the realm of economic development, the government should play a leading role in establishing development frameworks, providing basic development conditions, and constructing social safety nets, while using the market mechanism as the fundamental tool for economic development.
To avoid government failure and build an effective government, it is crucial to use institutional mechanisms to curb corruption.