International Workshop

NDRC&DRC

Li Xiaoxi

September 3rd, 2007

Three Major Driving Forces for Transforming the Government

Functions

2

Introduction: Three Relationships regarding to Transforming the Government Functions (with

different opinions)

Big Government and Small Government: which means the management range of government, and what should government do?

Powerful Government and Weak Government: which means how about the management degree of the government and how can government do it.

Good Government and Bad Government: Which relates to how to do it well and make the public satisfied.

3

Theories regarding to Relationship between

Government and Market （ The key for transforming the government functions is the

relationship between government and market ）

Adam Smith ---- Government: the “watcher”, safety, justice

of the public and the management on public undertakings

Liszt ---- Nationalism: Government intervention and

protection

Keynes --- Active intervention and regulation of government

Samuelson ---Integration of government and market

4

Three Major Driving Forces for Transforming the Government Functions

Internal driving force--- Marketization

External driving force--- WTO

Technical driving force--- Infomationization (e-government)

5

Characteristic of transforming the government functions in China

Old-oriented transformation--- transform the plan-adapted into

market-adapted

Perfect-oriented transformation--- transform the government

function with immature market economy into normalized market

economy

Innovation-oriented transformation--- Examples from

advanced countries in terms of government function innovations

6

7

Marketization reform’s push on transformation of

the government functions Central Government’s decision to restructure the economy in 1984

——Main functions of the government agency are: draw up strategies, plans, guiding principles and policies; coordinate regions, departments and enterprises; deploy the key projects; master and make use of economic regulation means; manage the communication and cooperation of foreign economic technology, etc.

Central government’s decision on some problems to establish the socialism market economy institution in 1993

——Functions of the government are: draw up and implement macro control policies, make a good job of infrastructure construction, create a good development environment for the economy. Cultivate market system, monitor market operation and preserve equal competition, manage State-owned assets and monitor its operation, etc.

8

Marketization reform’s push on transformation of the government functions

Report of the Sixteenth National Congress of Communist Party in 2006

——Perfect government functions on economic regulation, market monitoring,

society management and public service, reduce and normalize the

administrative approval. Take advancement of economic growth, stabilizing

prices, maintaining the equilibrium of balance of payment as the main

objectives of macro-control.

The Decision on some problems to perfect the socialism market economy

system in 2003

——According to the requirements of the Five Balanced development, develop

the market’s fundamental functions in resource allocation, strengthen the

vigor and competitiveness of the enterprise, perfect the national macro-

control, and perfect government’s functions on society management and

public service.

9

10

Marketization reform’s push on transformation of the government functions

Decision on some key issues to establish socialism

harmonious society in 2006

——According to the requirements on functions

transformation, unified rights and liabilities,

strengthened service, improved management and

advanced efficiency, to deepen the reform of

administrative management system, strengthen

institutional set up, and pay more attention to

implement the functions of society management and

public service.

11

Summary: the transformation of the government functions mainly includes 4 aspects below

Without a clear line between the functions of the government and

enterprises ——> Separate government functions from enterprise

management

Set targets, arrange projects, divide investments, goods and

materials ——> Mainly draw up the development strategy, long

term plan and key guiding principles and polices

High-centralized direct planned management ——> Macro

economy regulation system giving priority to indirect regulation

Put administrative measures first ——>Put economic and legal

measures first, turn secondary lines into administrative measures

12

Dispute: Marketization Reform on the Government self

Marketization reform on the government self will promote the great changes on government functions

(America) Politics expert Guy Peters “Future of Government Administration: Four Models)(1996), which addresses “marketization government”--- Implement administrative management according to the operation model of the enterprise

American government issued a report of “Create a government with low cost and high efficiency” in 1993, which addresses to make use of the market force to perfect the service function of the government ……

Western countries think that, the management model of enterprise is superior to the traditional administrative management measure, as the government can make best use of the market measures of contract, encouragement and taxation regulation. So we should permit the individual department to provide public goods as competitors.

13

Dispute: Marketization Reform on the Government self

Introduce the market system into government management : Firstly, establish external market, government can ask the society to

do some services such as rubbish management, environment

management and even criminal control;

Secondly, establish internal market, the government can ask related

agencies to manage some public undertaking through contract, such

as media care service and education.

Thirdly, encourage competition in and out of government, to improve

the service quality;

Fourthly, make use of the management experience of enterprise on

government management. For example, the wage system for public

servant decided by their grade can be replaced by their performance.

14

External Driving Force: WTO promotes the transformation of government functions

The “WTO-entry” can make the world to help and support China to change into a county under the rule of law, so the meaning of it is very great.

The direction of the transformation of government function is much clearer.

The government’s measure on society management is more transparent

Government’s management on enterprise transforms from differed and direct management to fair and indirect management, without discrimination and competition-oriented.

The division between the government and law is much clearer: 1). Reduce administrative intervention, and normalize administration according to the law; 2). Coordination between the government and legislative agencies, revise and clear up related laws and regulations in China; 3). Improve the unity, coherent and transparency in the process of legislation and implementation.

Taking more account of international practices and the economic coordination between China and foreign counties when setting the macro economy policies

15

The Third Driving Force: Infomationization Technology (E-government)

In fact, e-government is a reconstruction on the

present government status in the industrial age. Key is the e-government--- not equal to a website of

government

Market is the driving force——demand-oriented

Government is important, but it is not the God.

The public is the basis ——Form and cultivate e-public

16

17

E-government promote the transformation of government functions (1)

Transformation of the administrative objectives and work style of the government

New partner relationship among government, enterprise and the citizens

The public’s participation in deliberating and administration of state affairs, and the construction of a clean and honest administration

Case: Portal site of American Federal Government FirstGov Transformation of government’s management model

——From “Authoritative management” to “Modern management based on service”

——More transparent management measures

——The management and service by government on the enterprise (more equal communication measures)

——The management and service by government on the public

18

E-government promote the transformation of government functions (2)

Improve the government’s capacity on administration according to law

——Strengthen extensive monitoring on the government administration according to law

——Promote the promulgation and implementation of government’s assisting policies

Case: when China Securities Regulatory Commission implemented one program, they received more than 7000 comments from the internet, which were divided into 7 categories.

Improve the work efficiency of the government

——The government is the biggest information possessor and handler and the biggest user of information technology

Case: Infomationization of e-port

19

E-government promote the transformation of government functions (3)

New division of government function and

new adjustment of organizational structure

——Some international experts divide the government business into

9 categories, with 165 items (including resident service, justice and

public safety, taxation, national defense, education, administrative

management, transportation, regulation and democracy, and post),

all of which will be used to evaluate the development degree of e-

government in one county.

20

E-government promote the transformation of government functions (4)

——New concepts of government service got from applied information

technology, such as:

“one-stop-service”——The resident or enterprise just need to go to

one comprehensive office of the government, then the problem will

be solved.

“non-stop-service” ——The resident or enterprise just need to go to

one government website rather than government office, then the

problem will be solved.

“24×7”——Service available at any time

“citizens-relationship-management”

——Structural adjustment of government agencies, and the interaction

between different governments