What are the shortcomings of traditional public policy analysis?

Orthodox economists define public choice theory as: public choice theory is a kind of economics and politics that studies the way of government decision-making. The public choice theory examines the operation modes of different electoral mechanisms and points out that no ideal mechanism can attribute all personal preferences to social choices. This paper studies the government failure when state intervention cannot improve economic efficiency or income distribution is unfair. It also studied the short-sightedness of members of Congress, the lack of strict budget, and the government failure caused by funding the campaign.

The origin of public choice theory can be traced back to the Swedish economist Wicksell at the end of 19. He put forward the theory of Yi-ology of political resources and the principle of consistency. It really came into being in the 1940s, and formed an academic trend of thought in the 1960s and early 1970s. The main contents of public choice theory include: national theoretical election rules, party economics, interest group theory, rent-seeking theory, government failure theory and constitutional economics. Methodological individualism, economic man hypothesis and political trading market are the three most distinctive aspects of public choice research methods. Methodological individualism means that all actions are human actions; After the behavior of individual members is excluded, there will be no passbook reality of social groups. Economic man hypothesis refers to people who are active in the political field, and its purpose is to maximize personal interests, which is also based on cost-benefit analysis. The concept of political trading market means that politics is a series of trading processes conducted by individuals and groups out of self-interest motives. Political process, like economic process, is based on trading motivation and trading behavior, and is the exchange of interests.

The economic crisis that swept through the capitalist world in 1930s broke the illusion of "market is omnipotent" in traditional economics-a perfectly competitive market system can automatically realize the optimal allocation of social resources. This objectively promoted the rise of Keynesianism. Keynesian economics advocates abandoning laissez-faire market economy policy and implementing government intervention to correct market failure and improve economic operation efficiency. However, with the strengthening of government intervention, the limitations and defects of government intervention are increasingly exposed, the government's fiscal deficit is increasing day by day, the government's scale is expanding, a large number of government expenditures fall into the pockets of special interest groups, the government's social welfare plans have failed one after another, and the economy has stagnated and expanded. The theory of public choice overcomes the limitation of western mainstream economics that mainly studies the supply and demand behavior of economic market and its corresponding economic decision-making, and regards political factors as exogenous variables in economic decision-making. It applies the economic analysis method to the analysis of political market, and opens the black box of government to us, aiming at revealing "government failure" and trying to overcome the defects of government intervention. As Buchanan said, "the defect of the market is not a sufficient condition for handing over the problem to the government", "the defect of the government is at least as serious as the market".

Based on the hypothesis of "economic man", the theory of "public choice" tries to integrate the individual choice behavior in the economic market and the public choice behavior in the political market into a unified analysis model, that is, the "economic man model", thus correcting the theoretical defect that Keynesian economics puts the political system outside the economic analysis.

Buchanan's government theory studies the limitations of government intervention or government failure under the condition of market economy according to the analysis model of economic man. This is the core issue of public choice theory.

The so-called government failure means that the individual's demand for public goods is not well met in modern parliamentary democracy, and public relations departments are prone to waste and abuse resources when providing public goods, resulting in excessive public expenditure or reduced efficiency, and government activities are not always as "effective" as they should or theoretically say. In Buchanan's view: "As an agent of public interest, the role of the government is to make up for the deficiency of the market economy and make the social effect of the decisions made by brokers higher than before the government intervention. Otherwise, the existence of the government has no economic significance. However, government decisions often fail to achieve this goal, and some policies have the opposite effect. They weaken the social' positive effect' of state intervention, that is, the policy effect weakens rather than improves social welfare. " So a question is raised: why does government intervention have a "negative effect" and how to make up for these defects from the system. Buchanan's answers to these questions constitute the theory of government failure in public choice theory.

Buchanan deeply analyzed several manifestations of government failure and its root causes, and put forward specific policy suggestions on how to remedy this "failure".

(A) the inefficiency of government policies, that is, the public * * * decision-making mistakes. Public policy is mainly government decision-making, and the basic means of government intervention in economic life is to formulate and implement public policy. According to the public choice theory, government decision-making as a non-market decision-making is different from market decision-making. In government decision-making, although a single selector is also a decision-making unit, it is usually the collective rather than the individual who makes the final decision, taking public goods as the decision-making object, and through a certain orderly political market (that is, votes are used to show support for a certain policy). Therefore, compared with market decision-making, political decision-making is a very complicated process with considerable uncertainty, and there are many difficulties, obstacles or constraints, which make it difficult for the government to formulate and implement good or reasonable public policies and lead to public policy mistakes.

In Buchanan's view, there are many reasons for public policy mistakes: (1) There is no so-called public interest as the goal of government decision-making, which has been proved by Arrow's impossibility theorem. "If the possibility of interpersonal comparison of utility is ruled out, it is impossible to express various social preferences in the order of personal preferences by integrating personal preferences." Therefore, there is no answer to the question of "what society needs", so people have reason to question the necessity and rationality of government intervention in economic activities. (2) Even if there is a certain public interest consciousness in the real society, the existing public decision-making mechanism is difficult to achieve the purpose of realizing this interest because of its inherent defects. (3) Incompleteness of decision information. There are always many difficulties and costs in obtaining decision information. No matter whether the information of voters or politicians is incomplete, most public policies are formulated on the basis of insufficient information, which will easily lead to decision-making mistakes. (4) The "short-sighted effect" of voters. Because of the complexity of the policy effect, it is difficult for most voters to predict its impact on the future, so they only pay attention to the immediate impact. In order to seek re-election, politicians will take the initiative to cater to the short-sightedness of voters and formulate some policies that will do more harm than good in the long run. (5) The "rational ignorance" of voters. Because voters need to pay a certain cost to collect candidates' information when making decisions, as rational economic men, if the cost is too large, voters will not vote when weighing their own cost-benefit calculations. In real life, many voters often want others to vote out of hitchhiking psychology, so that they can have fun. This is called "rational ignorance" of voters. This will lead to politicians who come to power through votes not representing the interests of the majority, and their policies can only represent the interests of some people at best.

(b) Inefficiency of government agencies. According to the theory of government failure, the reasons for the inefficiency of government agencies are: (1) lack of competitive pressure. Because the bureaucracy monopolizes the supply of public goods, in the absence of competitors, it may lead to excessive investment by government departments and produce public goods that exceed the needs of society; On the other hand, protected by the lifelong employment regulations, there is not enough pressure to improve its work efficiency. (2) Without the incentive mechanism to reduce costs, administrative resources are easily wasted. First, officials spend taxpayers' money. Because there is no property right constraint, they don't have to worry about the cost of all their activities at all. Secondly, the power of officials is monopolized by the possibility of unlimited overdraft. (3) The regulatory information is incomplete. Theoretically, the power of politicians or government officials comes from the transfer of people's rights, so they can't do whatever they want, but must obey the political supervision of citizen representatives. However, in the real society, this supervision function will lose its effectiveness because of the incomplete supervision information. Coupled with the aforementioned government monopoly, supervisors may be manipulated by supervisors.

(3) the government's rent-seeking. "Rent-seeking means that voters, especially interest groups, urge the government to help them establish a monopoly position through lobbying, bribery and other legal or illegal efforts to obtain high monopoly profits." It can be seen that the profit obtained by rent-seekers is not the result of production, but the distribution of existing production results. Therefore, rent-seeking is unproductive. At the same time, the premise of rent-seeking is the intervention of government power in market trading activities, which leads to the ineffectiveness of resource allocation and the distortion of distribution pattern, resulting in a large number of social costs: the waste of resources in rent-seeking activities, the waste of resources in political rent-seeking caused by economic rent-seeking, and the loss of social efficiency after rent-seeking success. On the other hand, making things difficult will also lead to the power struggle between officials of different government departments, affect the reputation of the government and increase the cost of clean government. According to the public choice theory, there are three main types of rent-seeking: (1) rent-seeking through government regulation; (2) Rent-seeking through tariffs and import and export quotas; (3) Rent-seeking in government orders.

(4) the expansion of the government. The expansion of government departments includes the increase of government department members and the improvement of government department expenditure level. Buchanan and others explained why government agencies are self-expanding from five aspects: (1) As a provider of public goods, the elimination of external effects leads to expansion; (2) As a redistributor of income and wealth, the government leads to expansion; (3) The existence of interest groups leads to inflation; (4) The existence of bureaucracy leads to inflation; (5) Fiscal illusion leads to expansion.

Therefore, Buchanan and other public choice schools are deeply suspicious of the current western democratic system and the state and government, as Buchanan said: "The public choice theory has replaced the romantic and illusory concept about the government with a set of pessimistic concepts. The theory of public choice has opened up a brand-new way of thinking, and the romantic and illusory view of the behavior of the government and rulers has been replaced by the skeptical view of what the government can and should do. Moreover, this new view is more in line with the facts we have observed. "

Third, the policy proposition to remedy the government's failure.

To sum up, under the current democratic system, no choice mechanism can be called optimal choice mechanism or efficient choice mechanism. Since the existing selection mechanism in the political market is out of order, where is the way out? The theory of public choice puts forward two ideas for this: one is market-oriented reform, and the other is constitutional system reform. The former viewpoint is mainly put forward by Chicago School in public choice theory, and the latter viewpoint is mainly put forward by Virginia School in public choice theory.

The so-called market-oriented reform is an attempt to improve the operating efficiency of the political market by introducing the competitive mechanism of the economic market. The idea of market-oriented reform mainly includes three aspects: (1) clearly define the property rights of public goods-public land, high seas and public resources, so as to put an end to "fee evasion" and predatory consumption in the use of these public goods. (2) Introduce the competition mechanism between public departments, reconstruct the incentive mechanism of government officials, and organize the production of public goods according to the principle of market economy. (3) Redesign the preference display mechanism of public products so that voters can show their preferences as truly as possible.

The so-called constitutional reform is an attempt to establish a set of constitutional rules for economic and political activities, impose constitutional constraints on government power, and improve politics by reforming decision-making rules. In the view of public choice theorists, the most important thing to overcome the limitations of government intervention and avoid government failure is to make a fuss about the constitution. Buchanan believes that to improve the government's administrative procedures, we must first reform the rules. Therefore, "the concept of public choice directly leads people to pay attention to and attach importance to the choice of rules, constitutions, constitutions and rules." Buchanan and others focus on analyzing the rules formulated by the government and the rules or restrictions restricting economic and political activities from the perspective of constitutionalism, that is, they do not directly put forward specific suggestions for decision-makers, but provide a guiding or normative suggestion for constitutional reform and a series of necessary rules and procedures for policy making, so as to make the policy plan more reasonable and reduce or avoid decision-making mistakes.

Fourthly, the enlightenment to the institutional reform of China government.

1. The reference significance of government failure theory and its policy proposition.

The Asian Wall Street Journal added a commentary: "Nothing is more difficult than the structural reform in China. Every institution does not want to decentralize. They agree with institutional reform in principle and actually oppose it. " Since the reform and opening up, China has carried out three large-scale government institutional reforms in 1982~ 1983, 1987~ 1988, 1993~ 1996 respectively, but so far, So, how to make institutional reform completely out of the "strange circle"?

Undoubtedly, the theory of government failure in public choice theory provides good theoretical support and policy suggestions for China's institutional reform.

The mode orientation of China's government reform is to change from the initial political management-oriented government mode to the democratic service-oriented government mode. At present, in China's political market, the factors of policy mistakes pointed out by public choice theory still exist, scientific decision-making and effective implementation of decisions are still difficult, rent-seeking activities caused by government intervention still exist, and because economic development is a continuous process, different modes of government behavior cannot be completely separated in time, so it is easy to simply transplant the behavior mode of government management economy under the planned economy system to the market economy system. And we expect a more efficient new government model, which can only be formed under the newly established basic rules, as Buchanan spent: "It is not important to change a game or the result of a game, but it is important to change the rules of the game." The fundamental drawbacks of the traditional government system cannot be attributed to some specific operational mistakes, such as the lack of accuracy and scientificity of government plans and the isolation between localities and departments. In fact, these drawbacks are the inevitable product of the over-centralization of government system. Therefore, only changing the specific operating procedures and links under the old system without fundamentally reforming the government model with too concentrated power will not help solve the problem.

Therefore, in order to play the role of government management more effectively and correct government failure, it is especially necessary to pay attention to the legal system and system construction in the current government reform. Based on the analysis of government failure and policy suggestions of public choice theory, the reform of government institutions in China should do well in the following three aspects:

First of all, we should change our ideas, abandon the concept of "government is omnipotent" formed under the traditional planned system, and correctly understand the role of government intervention in the economy. We should not exaggerate unilaterally, let alone weaken blindly. "The national economies of the East, the West and the South all need wise governments" [1]. In the process of developing market economy, we must grasp the boundaries of government intervention, determine the content, scope and means of government intervention, and give play to the main role of market mechanism and the supplementary role of government intervention.

Secondly, introduce competition mechanism to carry out market-oriented government management reform. Today, with economic construction as the center, economic function has become the primary function of the government, and the government's monopoly on public goods in the economy is the most important reason for the abuse of economic function. Therefore, when determining the economic functions of the government and its subordinate institutions, we should introduce competition mechanism as far as possible to break the monopoly situation. On the one hand, it improves the efficiency and quality of public services, on the other hand, it also relieves the financial pressure of the government. Especially in the natural monopoly infrastructure industries such as telecommunications, electric power and railway transportation, we should introduce a competition mechanism to allow and encourage the private sector to enter within a certain range, so as to improve the efficiency and level of government management of public service departments.

Finally, it is necessary to strengthen the construction of the government's rule of law and supervision system to legalize government behavior. The theory of public choice emphasizes risky reform and pays attention to the construction of constitution, laws and rules, especially the reform of public decision-making rules. Market economy is an economy ruled by law, and so is modern society. The establishment and operation of market economic order must be guaranteed by law, and political and social life must also be regulated by law. Therefore, in the process of transition to market economy, we must strengthen the construction of the legal system and bring government actions into the legal track, especially the legalization of public policy decisions and public policy decisions, so as to minimize the injustice and corruption caused by the arbitrariness of government actions and improve the quality of public policy formulation and implementation. The government is also a rational economic man, which reminds us that in addition to strengthening the government's self-discipline mechanism, we must also strengthen the external supervision and restraint mechanism, and step up the formulation of laws and regulations to supervise government behavior to prevent government corruption and injustice.

2. Treat the government failure theory of public choice theory comprehensively and dialectically.

Although the government failure theory of public choice school points out the disadvantages of western political system, its policy proposition also has good insight and practical significance. However, there are insoluble contradictions in the theory of public choice, and some of its own theoretical systems are chaotic and cannot be justified.

Criticism of government failure theory in public choice theory mainly focuses on the following aspects:

(1) on human behavior motivation

According to the broker hypothesis of public choice theory, the author thinks that everyone's behavioral motives are complex and diverse, and cannot be simply divided into egoism or altruism. Personal motivation contains a lot of selfish desires for material interests, which permeates deeply and widely, so every public institution and private institution must restrain and restrict it in some way. But most people's motives also include different degrees of generosity, selfless moral factors, the habit of accepting other people's obligations, and interest in returns other than money. Therefore, people's motivation can not be attributed to a single selfish motivation. Therefore, it is not valid to describe the theory of tackling key problems as the motive of political behavior to some extent. It is not based on the observation of real life, but mainly on formal assumptions. Public choice theorists only choose one of the motives with multiple functions, and then imagine a dynamic theoretical world through this unique motive. This is obviously unreasonable.

② On the role of political market and government.

The theory of public choice is based on the western democratic political system, but China's political party system and political election system are different from the west and have their own special national conditions. It is not advisable to simply copy the public choice theory that originated and matured in the western political party system.

On the other hand, China's economy is in a transitional period. Without active and effective government intervention, it is impossible to realize industrialization and the transformation from the traditional economic system to the market economic system. Although different countries have different forms of government functions at different times. "Countries that are still poor can't expect to rise like the four little dragons in Asia just by passively opening up to the world economy."

Therefore, when we apply the theory of government failure based on public choice theory, we must treat it dialectically. The reform of political system is an arduous task, and it cannot be used as an expedient measure for quick success and instant benefit. The reform of "visible hand" will be the key link of China's successful economic transformation and industrialization, and it must be treated with caution.