An Analysis of the Problems in Public Goods Provision in Rural Communities and the Countermeasures
From 2004 to 2013, the state issued ten consecutive No. 1 Central Documents themed on "agriculture, rural areas and farmers," in which the issue of rural public goods provision was mentioned many times, and the goal of building a new socialist countryside regarded the effective provision of rural public goods as key, treating it as an important factor affecting the level and progress of new countryside construction. The state of public goods provision in rural communities not only directly affects villagers' production and life, but is also directly related to the realization of the goal of new countryside construction.
1. The institutional arrangements for public goods provision in rural communities
The abolition of the agricultural tax changed the "balanced" pattern of extra-institutional provision of public goods that had existed since the implementation of the household contract system, and rural public goods provision fell into difficulty. Through the redesign of the public goods provision system, the current rural public goods provision mechanism was formed, with state finance as the main body and community self-help as a supplement.
(1) Transfer payments with state finance as the main body
Since the start of new countryside construction, rural public goods provision has mainly been based on transfer payments from central and local finance. The central government mainly makes fiscal transfer investments in rural public undertakings and public goods provision through two channels: first, for rural public goods borne by the central government, whose decision-making and implementation are completed from the top down by relevant departments. These mainly include investment in infrastructure construction and its renewal and transformation, investment in agricultural production service fields such as scientific research and education, various subsidies to farmers, and investment in the development of rural social undertakings. Second, in order to strengthen the ability of counties and townships to provide rural public goods, transfer payments are made from the central and provincial and municipal governments to counties and townships, with decision-making and implementation completed by counties and townships and rural communities. In recent years, the central government has increased investment in rural public goods; not only has the total amount of fiscal support for agriculture grown by a large margin and the absolute amount increased rapidly, but the coverage has also been broad, providing important support for solving the difficulty of rural public goods provision, and public goods provision has achieved considerable development.
(2) Supplementary provision based on rural community organizations
While increasing fiscal input, the central government has also carried out supplementary provision of public goods in rural communities through institutional design, mainly in the form of the "one matter, one discussion" system for funds and labor required for village road construction, collective production and public welfare undertakings, and the "farmer water user associations" that manage small village-level irrigation facilities.
1. A democratic fund-raising system - "one matter, one discussion." As an important supporting policy carried out in step with the reform of rural taxes and fees, the direct purpose of the "one matter, one discussion" system is to decide matters related to the village's public undertakings through village meetings or village representative meetings, thereby replacing the former public reserve funds and "two labor contributions" used for rural public welfare construction. As a basic system for financing rural public goods, the "one matter, one discussion" system has relatively clear goals and effectively controlled the problem of "arbitrary charges" before the tax and fee reform. However, due to the "lack" of supporting measures, this system from the start of pilot testing showed a situation in which "matters are hard to discuss, discussions are hard to decide, and decisions are hard to implement," and it failed to fundamentally change the state of public goods provision within villages. To make up for the shortcomings of the "one matter, one discussion" institutional arrangement, the "one matter, one discussion" fiscal reward and subsidy system emerged and achieved good results. First, it solved some public demand problems within the scope of villages that were difficult to solve through collective action, effectively overcame the "free-rider" problem, improved farmers' production and living environment, filled the gap in state fiscal provision of public goods to rural communities, and promoted the development of new countryside construction. Second, it built a new mechanism for financing village-level public goods provision and initially formed a new multi-source public goods provision mechanism of "fiscal funds guiding, farmers raising funds and contributing labor, and society donating and sponsoring," fully mobilizing the enthusiasm of all parties for investment in public goods. Third, it explored a democratic deliberation mechanism combining "top-down" and "bottom-up," in which the entire process involved farmers' autonomous participation, organically combining farmers' demand preferences with the government's decision-making preferences and effectively meeting the real needs of the farmer masses.
2. A non-administrative organizational system - "farmer water user associations." After the implementation of the household contract system, whether village-level or cross-regional farmland water conservancy infrastructure, because of its public goods attributes, triggered obvious "free-rider" behavior, and the government and villagers, as the responsible subjects, were both in a state of "absence" in the process of "game-playing," seriously affecting agricultural production and rural economic development. After the reform of rural taxes and fees, the "farmer water user association" model began to be promoted in an all-round way. The existence of large numbers of social, non-administrative "farmer water user associations" throughout the country is a powerful supplement to the in-system provision of rural public goods and an innovation in the organizational system by which the state provides rural public goods outside rural organizations. Because "farmer water user associations" follow the establishment principle of "whoever benefits bears the burden; whoever invests owns it," their ownership is clear and they can well solve the "free-rider" problem in rural public goods provision. At the same time, as rural community organizations, "farmer water user associations" differ from the administrative nature of rural organizations by virtue of their social and non-administrative character; they are cooperation among farmers based on voluntariness and can, in a state of transparent information, meet farmers' needs, achieve the "Pareto optimum" of provision, and realize the best equilibrium state of public goods provision.
2. Problems existing in public goods provision in rural communities
(1) Insufficient total amount and structural imbalance of fiscal transfer investment
1. Insufficient total investment in rural public goods. Although the absolute amount of state fiscal support for agriculture has increased considerably, relative to total state fiscal expenditure, the average annual growth rate of fiscal support for agriculture is in fact far lower than the growth rate of total fiscal expenditure, leaving public goods provision in a state of shortage and low efficiency. Restricted by the non-excludability and non-rivalry characteristics of public goods, rural productive public goods and developmental public goods embody the nature of pure public goods and can only be invested in by the state. However, due to the limited nature of central finance, it is impossible to meet all public needs, and the fiscal revenue of local county and township governments for investment in rural public goods is also "negligible," resulting in many rural areas still having shortages in the provision of productive public goods such as irrigation water, inadequate development and extension of agricultural technology, and non-standard market supply and demand information. The provision of living and developmental public goods such as education services, medical and health care, and social security is also insufficient. This is very inconsistent with agriculture's position in national economic development and also shows that there is still great room for improvement in the degree of the state's attention to the "agriculture, rural areas and farmers" issue.
2. Structural imbalance in investment in rural public goods. Although the scale of state fiscal support for agriculture has grown relatively quickly, the expenditure structure shows an unbalanced trend. This is specifically manifested in the following points: first, insufficient investment in public goods closely related to farmers' basic living needs. In terms of public infrastructure, although the state has increased investment in rural infrastructure and implemented projects to connect every village with water, electricity and roads, there are still many problems in coverage, project quality, and later-stage management and maintenance; in terms of cultural and sports life, although some places have cultural and entertainment facilities and venues such as "farmers' bookstores" and "cultural compounds," problems such as insufficient resources and public gambling are relatively prominent, and sports and fitness venues are relatively scarce; in terms of public security, defects in rural security mechanisms strongly call for government intervention; in terms of environmental protection, rural environmental pollution and ecological destruction are also problems urgently needing solution. Second, there is a shortage of public goods provision related to farmers' own sustainable development. In recent years, state finance has increased investment in rural education, but the gap between the software and hardware facilities of rural schools and urban schools is very obvious; whether in teaching staff or teaching facilities, even sports equipment such as basketballs and footballs, it is hard to associate them with modernization, let alone teaching level and teaching quality. As for rural medical and health services, the new rural cooperative medical system has alleviated farmers' health risks, and finance has also invested a great deal in hardware facilities, but the level of medical services is generally low and cannot meet farmers' health needs. Villages and township communities lack health care and medical institutions, and "difficulty in seeing a doctor" still troubles most farmers. In terms of social security, there are problems such as small coverage of security items, low security levels, and an unsound security system.
(2) Certain defects in the fiscal reward and subsidy policy of "one matter, one discussion"
The implementation of the fiscal reward and subsidy policy of "one matter, one discussion" has achieved certain results, but because it has been promoted for a relatively short time and there are great differences among regions, some problems have been exposed in practice. First, policy publicity is inadequate. Not only do the farmer masses not understand the policy, but rural cadres and even county leaders also have only a half-understanding of it. Second, it is relatively difficult to convene meetings. Because farmers' public awareness is weak and they are seriously affected by "small-peasant mentality" when solving public problems, they are unwilling to attend village meetings or village representative meetings, lack the necessary enthusiasm and initiative, and few respond when village public issues are discussed, making it difficult to form deliberative resolutions. Third, it is difficult to secure labor and fund contributions. It is hard to convene village meetings, and it is even harder to implement the labor and fund contribution policies resolved at village meetings. In addition, the existing standards for fund and labor contributions and fiscal rewards and subsidies are low, making it difficult to solve practical problems. Fourth, the operating procedures are imperfect. Due to the lack of strict, clear standardized procedures and necessary institutional constraints, in specific operation there are certain problems ranging from the scope of project implementation to the control and management of project funds.
3. Causes of the problems in public goods provision in rural communities
(1) Causes of the problems in fiscal transfer investment
1. The institutional "habitus" of the urban-rural dual provision of public goods. The reform of the rural tax and fee system that began in the new century, while reducing farmers' burdens, also led the government to try to make up for the "vacuum" in extra-institutional provision of rural public goods caused by the tax and fee reform by increasing fiscal support for agriculture, but in actual operation the urban-rural dual provision system of public goods did not undergo substantive change. From the proportion of fiscal support for agriculture in total fiscal expenditure, it can be seen that the absolute amount of fiscal support for agriculture has clearly increased, but in total fiscal expenditure one cannot yet see "special affection" for rural areas, and the "strategic welfare" of "industry repaying agriculture and cities supporting rural areas" has not yet been truly embodied.
2. The government's "top-down" mandatory provision. The government's "top-down" decision-making model not only embodies the "path dependence" of the rural public goods provision system, but also embodies a provision preference in which governments at all levels are accustomed to carrying out work through plans and administrative orders. The reason lies in imperfect democratic election mechanisms and democratic decision-making expression mechanisms. At the same time, because the government is almost the only provider, farmers have no more room for choice, and even less can they actively choose public goods that can satisfy their own preferences through "voting with their feet." As for grassroots government officials, what they pursue are "political achievements" and "interests," and in work they are willing to issue matters in the form of policy provisions, or even mandatory directives. Such an official appointment and removal system, market selection mechanism, and logic of political behavior cause a mismatch between the supply and demand of rural public goods; some public goods needed by farmers cannot be well satisfied, or some public goods are oversupplied and resources are wasted, and the result is an imbalance between supply and demand.
3. The "weakening" of the public goods provision function of rural community organizations. Although the household contract system promoted high-speed growth of the agricultural economy through effective incentive mechanisms, it lacked effective incentives for public goods provision. With the collapse of the collective economy, the former platform for extra-institutional provision, the ability and efficiency of village collectives to provide public goods fell to a low point. At the same time, village-level organizations also encountered difficulties in functional positioning; village committees long bore the dual functions of government affairs and village affairs and could not well play their role as organizers of village-level public goods, thereby affecting the efficiency of public goods provision in rural communities.
4. The "powerlessness" and "absence" of the supervision system for public goods provision. In rural public goods provision there is a dual problem of excessive supervision and insufficient supervision. Excessive supervision is mainly reflected in the government's harsh approval conditions and cumbersome procedures for market entities or various social forces entering the field of rural public goods, thereby restricting private entities and civil service entities from entering the field of rural public goods. Insufficient supervision, on the one hand, refers to the lack of supervision and management by government departments over the use of public resources, causing public resources to be used excessively for personnel expenses or for matters unrelated to farmers. On the other hand, it refers to the lack of corresponding mechanisms for farmer participation, so that farmers cannot effectively supervise the government's provision decision-making behavior, resulting in undesired provision of rural public goods and waste of public resources.
(2) Causes of the problems in the "one matter, one discussion" system
1. Constraints of the "dilemma" of farmer cooperation. Weak public awareness makes it very difficult for farmers to reach collective action in "one matter, one discussion," which is related both to individual farmers' value judgments and to the internal structure of the village. In villages with a strong sense of clan identity, it is easy to form public opinion pressure within the clan, generate cooperative incentives, and villagers will treat the village's public undertakings as their own family's affairs, making cooperation easier and the implementation of "one matter, one discussion" easier. But in villages where blood relations are "too sparse," each individual cares only about the interests of his or her own small family, "free-riding" becomes the rational choice, individual rationality leads to collective irrationality, and cooperation falls into a dilemma. If there is also a lack of restraint and incentives from village organizations or village "elites," individual families cannot control one another, making the actual operation of "one matter, one discussion" even more difficult and making it very hard to achieve effective cooperation.
2. The impact of unreasonable division of government provision responsibilities. Because the administrative authority for regional public goods provision borne by local governments is far greater than the fiscal authority they bear after the tax-sharing system, although central and provincial finance provide certain fiscal transfer payments and provide public projects such as rural roads and tap water through the "one matter, one discussion" system, the local matching funds required for special appropriations are a fairly large gap. Thus, when implementing the fiscal reward and subsidy policy of "one matter, one discussion," governments at all levels often lack coordination, state finance and local finance sometimes cannot effectively coordinate and cooperate, relevant departments sometimes cannot effectively supervise during project implementation, and after project completion specific departments do not carry out later maintenance.
3. The "powerlessness" and "absence" of supervisory departments. This is mainly reflected in two aspects: first, supervisory departments do not act according to rules in review and approval, are relatively lax, lack guidance and correction for deliberation not conducted according to procedures, "turn a blind eye" to fund-raising not conducted according to standards, and do not stop or standardize it. Second, there is a lack of supervision and inspection of project implementation, and supervisory duties are not effectively performed. Existing problems are often passed back and forth among departments and not substantively resolved.
4. Countermeasures and suggestions for improving public goods provision in rural communities
During the period of new countryside construction, public goods provision in rural communities has improved greatly, but the government-led "top-down" fiscal transfer payment system and the "bottom-up" "self-help" provision system in which rural communities participate have not yet reached a state of organic coordination, and there is still room and necessity for further innovation. Innovation is needed at different levels, including the decision-making mechanism, financing mechanism, and supervision mechanism of public goods provision.
(1) Establish a decision-making mechanism organically combining "top-down" and "bottom-up"
For pure public goods in rural communities whose "free-rider" behavior cannot be excluded, their own characteristics require giving full play to the government's administrative coercive power and resource-mobilizing power, adhering to a "top-down" provision decision-making system, and doing the utmost to let the fruits of economic development benefit rural communities so as to realize urban-rural balance in public goods provision; for quasi-public goods in rural communities that can be effectively excluded through technical arrangements, the government should guide according to circumstances, fully mobilize the initiative of the broad masses of rural community residents, respect farmers' expression of public demand wishes, and guide farmers to express their true demand preferences with the satisfaction principle of "bottom-up" decision-making. Therefore, the government should give full play to its leading role in institutional innovation and should do some things and not do others in the process of institutional innovation. Through incentive mechanism designs such as cultivating rural community residents' willingness to express demand, raising the degree of organization of farmers' expression of public goods demand, and improving the work awareness and governing style of township governments, rural community residents should truthfully express their public demand wishes, so that decisions adapt to public opinion and effective connection is achieved among demand expression, demand transmission, and demand reception.
(2) Establish a financing mechanism organically combining "government-led" and "multi-party participation"
The scope and boundaries of public goods provision by the government and multiple subjects should be clearly defined, the allocation of decision-making power to make public goods provision decisions consistent with demand decisions should be resolved, the property rights boundaries that guarantee investors' investment enthusiasm should be clarified, and the "free-rider" problem should be well solved. The key to a "government-led, multi-party participation" financing mechanism is to form a provision financing mobilization model of "state mobilization as the main body and social mobilization as the supplement," organically integrate government input and private input, and realize multi-source financing of public goods provision in rural communities. According to the different nature of public goods and different provision subjects, under the leadership of state mobilization, the state mobilization mechanism and social mobilization mechanism should be organically aligned.
(3) Establish a supervision mechanism with "government supervision as the lead, farmer autonomy as the core, and multi-party participation as the guarantee"
Starting from improving overall provision efficiency, a pluralistic competition mechanism should be introduced; while giving play to the government's role, farmers and grassroots organizations should be attracted to participate in the management of public goods, realizing institutional innovation in supervision with "government supervision as the lead, farmer autonomy as the core, and multi-party participation as the guarantee." At the same time, the establishment of flexible, diverse, and adaptable autonomous supervision mechanisms should be taken as the key to implementing institutional innovation; farmers' public awareness should be guided; legal and social environments such as autonomous governance rules should be constructed; endogenous forces within rural areas should be allowed to fully play a foundational role in the field of public affairs; the broad masses of farming households should be allowed to participate in the supervision and management process of public goods in rural communities; mutual coordination, cooperation, and development among government public departments, farmer beneficiary subjects, and pluralistic social subjects should be realized; the supervision efficiency of public goods should be improved; and organic coordination and benign interaction between the government and multiple provision subjects should be formed.