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Analysis on the Root of Government Credit Crisis

Abstract: Social credit system mainly includes government credit, enterprise credit and personal credit. Among them, government credit is in a dominant position in the social credit system, and the whole social credit is promoted and developed based on government credit. This paper discusses the root of government credit crisis from the aspects of government credit theory, system, ability, interest and behavior, with a view to providing some reference for the construction of government credit system in China.

Keywords: theoretical system, the root of government credit crisis

"Credit", as a complex mechanism to maintain social value enjoyment and stabilize social expectation mode, is an ancient subject that human society must face. The social credit system mainly includes government credit, enterprise credit and personal credit. Among them, government credit is in a dominant position in the social credit system, and the whole social credit is promoted and developed based on government credit. As far as the whole social credit system is concerned, government credit is also facing a crisis. It is necessary to analyze the root of the current government credit crisis in China and solve the problem of government credit crisis from the root. At present, the root causes of our government credit crisis mainly include the following aspects.

Theoretical origin

Although the theory of government credit has not been put forward systematically and completely, other theoretical schools have provided a rich theoretical basis for this theory. The principal-agent theory is regarded by many scholars as one of the theoretical foundations of government trust, and the information asymmetry under the principal-agent situation is precisely the theoretical root of the government credit crisis. The public entrusts administrative power to the government, which is the principal and the government is the agent entrusted by the public. According to the authorization of the public, the government takes action to complete the entrusted public affairs. In order to effectively control the agent's behavior, the client needs to know the complete information of the agent itself and the objective environment, and what kind of institutional arrangements can limit the agent's opportunistic behavior.

However, in real life, on the one hand, due to the government's natural monopoly on information, on the other hand, the problems that the government has to solve are becoming more and more professional, which will lead to information asymmetry and make it difficult for the public to supervise and restrain the government. In the absence of effective supervision and restraint of government power, the relationship between the principal and the agent may be completely reversed, and the agent becomes a manager because he holds the power of the public. In this way, in order to maximize its own interests, the government may ignore the wishes of its clients, so that the wishes and interests of the public will not be responded, and the public will no longer be able to trust the government.

Institutional root

First, the administrative management system is not standardized. Although there are various forms of dishonesty in government behavior, they are all the same in essence, that is, the government fails to perform its management and service functions correctly and effectively, and cannot satisfactorily respond to public expectations and trust. Under the profound influence of feudal culture and planned economy system, the administrative management system of our government, especially local governments, is not standardized, and some managers exceed the entrusted power entrusted by the public. It is not uncommon for departments and localities to shirk their responsibilities or compete for interests.

Second, the restraint and supervision system is not perfect. In real life, China's current administrative supervision mechanism lacks due strength, and supervision cannot achieve due results. In administrative supervision, there are too many supervision subjects, weak supervision, unclear supervision functions and lack of independence, which leads to the supervision of power organs almost becoming a mere formality.

Third, the administrative accountability system is not perfect. So far, China has not established a complete system of administrative accountability and compensation. When the government's decision harms the public's interests, it should give some punishment to the main person in charge of the government, so that the act of dishonesty corresponds to the responsibility and consequences of dishonesty. For a long time, it has been difficult to clearly define the subject of power and responsibility of administrative personnel in China. Even if there is a clear responsibility subject, due to the lack of strict administrative procedure rules, it is impossible or impossible to hold the responsible person accountable when faced with the problem of administrative responsibility.

Fourth, the administrative assessment mechanism is not perfect. At present, the assessment mechanism of government officials' promotion is not perfect, which pays too much attention to political achievements and economic benefits and ignores the public satisfaction as the assessment standard.

Ability root

Limited financial capacity

The existence and operation of the government requires huge financial expenditure. If the financial capacity is weak, it will limit the performance of government administrative functions. However, the implementation of the government's administrative functions lacks necessary financial support, which makes the government's policy implementation lack material guarantee and ineffective. Lack of financial resources will also lead to the lag of social public services, such as education, health, medical care, water and electricity, transportation and other basic public products.

(B) the administrative operation ability is low

China's administrative management system has undergone more than 20 years of reform, and the institutional setup of local governments at all levels has been adjusted and streamlined many times, but there is still a situation of bloated institutions and inefficient administration. Under the same financial capacity, an administrative organization with strong operational capacity and high efficiency will undoubtedly meet the needs of social development and the public better than an administrative organization with low efficiency, and make the public satisfied and trusted.

(C) weak ideological mobilization ability

In institutional economics, ideology is the most important content of informal institutional arrangements. Values, social morality and customs will exert a subtle influence on people's choice behavior. Correct ideas lead to correct behaviors, and wrong ideas often lead to wrong administrative behaviors. On the surface, the government crisis is the anomie of administrative behavior, but on a deeper level, it is caused by values and concepts. For the government, by adjusting and changing the public's value preference through ideology, so that its ideology can be accepted by the public, the government will have strong prestige and people's trust. On the contrary, if the government's ideological mobilization ability is weak, it will be difficult to make the government's consciousness acceptable to the public.

(d) Insufficient institutional capacity.

Providing institutional rules is an important function and responsibility of the government. The government designs and organizes the implementation of new institutional arrangements according to social needs, so as to guide the behavior of social members and meet the needs of public interests. The government also sets legal space for the behavior of social members according to the system to build and maintain a stable social order. System is also a constraint on the behavior choice of "economic man". System is the most important social trust generation mechanism in modern society. Because some governments can't maintain the authority of the system and implement it effectively, it will directly shake the public's trust in the authority of the government.

Interest source

First, government officials have their own interests as "economic men". The main body of government behavior is government officials, who also have personal interests. Of course, it is impossible to be completely divorced from the realistic social and economic interests. Under the possible conditions, they should pursue the maximization of their own interests, especially since China's reform and opening up, people have paid more attention to pursuing their own interests, and these behavioral goals are not always consistent with the public's interests. The public's trust in the government comes from the personal experience of social real life and from the perception and judgment of dealing with government administrative officials. When the public does not feel justice, it will shake and disintegrate their trust in the government.

Second, government agencies also have their own interests. In fact, government agencies, as independent social and economic subjects, also have their own interests, and these interests do exist. With the increasing autonomy of government agencies in managing local public affairs, their self-interest behavior orientation tends to be strengthened, and even influenced by some special interest groups.

The third is the interests of local government agencies. Market economy needs a unified, open, competitive and orderly market. However, since the reform and opening up, in order to pursue rapid economic development, many places have intervened in the operation of the market economy by administrative means, artificially dividing the market, restricting fair competition and undermining market order. When local governments use various skills and strategies to compete for benefits, the public's trust in the government gradually loses.

Behavior root

(A) excessive government intervention in the market

In a mature market economy, the main functions of the government are to guide the macro trend of the market, cultivate the market system, supervise the market operation, maintain fair competition, create a good market environment, and let the market play a leading role in resource allocation. However, influenced by the long-term planned economic system, the traditional administrative thinking mode still exists to some extent. In some localities and departments, some administrative officials have misplaced their roles and intervened in microeconomic activities that should not be involved. The dislocation of government's role will not only play a role in maintaining social justice order and social credit system, but will only become the destroyer of credit system.

(B) government behavior does not meet the actual needs of public opinion

Some local leaders deviate from the principle of collective decision-making, do not follow the mass line, do not proceed from reality, and formulate some policies that are divorced from reality according to their own preferences and achievements, which not only wastes a lot of manpower, material resources and financial resources, but also has no value and benefit, resulting in the public's lack of cooperation with government policies and even more distrust of the government.

(C) short-term government behavior and policy instability

The establishment of good credibility requires local governments to maintain a high degree of caution when formulating policies, and they must also consistently implement them after the introduction of policies. The existence of the current administrative management system and the evaluation mechanism for the selection and appointment of cadres objectively forms an incentive mechanism that induces and drives local government officials to unilaterally pursue short-term economic growth performance. This means that the government's policies are no longer stable and continuous, which makes people lack confidence and stable expectations for the future, thus reducing the enthusiasm of enterprises or individuals to talk about credit and weakening the government's credit.

(D) the low degree of legalization of the operation of administrative power

National laws are the key to ensure the normal order of the country, and the government must act within the scope permitted by law. A good social credit environment is based on a sound system guarantee. It took western developed countries about 150 years to establish a fairly perfect credit legal system, which made credit no longer a simple moral norm, but a legal requirement under the market economy. The restriction mechanism for the operation of Chinese government's administrative power has not been fully established, and the relevant administrative regulations are poor in abstraction, standardization and operability, which leads to the abuse of power by law enforcement departments and law enforcement personnel, such as non-compliance, lax law enforcement, failure to investigate violations, and law enforcement violations.

Lack of openness in government behavior

China's government information is confidential, and the degree of publicity is low. Many normative documents involving public interests are not disclosed to stakeholders and the public, and the public has no means and channels to obtain information. The government information is not open, and the public lacks the basis of trust in the government. Even if the government tries to pursue rationality, it is difficult to get public understanding and support.

(6) The social credit system is not perfect.

In the process of the development of market economy in western countries, the social credit system is gradually complete, forming a relatively systematic credit system. A complete social credit system has played a positive role in promoting the construction of government credit. At present, China is in a period of economic and social transformation. Due to the influence of cultural tradition and small-scale peasant economy tradition and the lack of social credit guarantee, China has not yet established a good social credit system.

References:

1. A He Xin. Reflections on China's Government Credit [J]. Journal of Central University of Finance and Economics, 2006(3)

2. Tang Liping. Reflections on the Development of Honesty [J]. Journal of Shanxi Radio and TV University, 2006(6)

3. Chen Shuzhen. The current lack of government credit in China and its harm [J]. Journal of Shanxi Radio and TV University, 2007(4)

4. Wu Kaisong. On the Credit Crisis of Local Governments in China [J]. Contemporary Economy, 2006(9)

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