Effective Supply Mechanism of Urban Public Goods

Table of Contents

1. Frontmatter

2. Chapter 1. Introduction

   Baijun Wu, Maogang Tang, Zhen Li

   This chapter provides an in-depth exploration of the evolution of urban public goods supply in China since the founding of the People’s Republic of China. It meticulously traces the historical trends and reforms in public goods supply systems, highlighting the shifts from a planned economy to a more market-oriented approach. The chapter delves into the economic advantages of cities, emphasizing the concentration of economic factors and the positive externalities generated by urban economic activities. It examines the critical role of public goods in urban socioeconomic activities and the welfare of residents, discussing the challenges and opportunities in ensuring an adequate supply of these goods. The analysis covers three distinct stages of development: the planned economy period, the post-reform and opening up period, and the post-2008 financial crisis period. Each stage is characterized by unique economic and political dynamics that have shaped the supply of public goods. The chapter also addresses the economic characteristics of public goods, such as non-rivalry, non-excludability, and externalities, and the challenges in balancing supply with demand. It explores the role of government, market, and multi-stakeholder cooperative supply mechanisms, providing a comparative analysis of their strengths and weaknesses. The chapter further discusses the financing mechanisms for urban public goods, including government fiscal investment, market financing, and public–private partnerships (PPPs). It highlights the importance of diversifying supply mechanisms and the need for robust legal frameworks and regulations to govern public goods sectors. The chapter concludes with a forward-looking perspective on the future of public goods supply in China, emphasizing the need for systemic reforms and the integration of modern technologies to enhance the efficiency and effectiveness of public goods provision. This comprehensive analysis offers valuable insights into the complexities of urban public goods supply and the economic implications of public goods provision, making it an essential read for anyone interested in urban development and public policy.

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3. Chapter 2. Evolution of Urban Public Goods Provision Mechanisms

   Baijun Wu, Maogang Tang, Zhen Li

   This chapter delves into the historical evolution of urban public goods provision in China, tracing the significant transformations that have occurred since the founding of the People’s Republic of China in 1949. Initially, the government, public institutions, and state-owned enterprises dominated the provision of urban public goods under a highly administrative approach. The chapter explores how the economic reforms and opening up in 1978 led to a diversification of the main entities involved in urban public goods supply, transitioning from a government-led to a market-oriented system. It provides a detailed analysis of the shifts in government fiscal expenditures, highlighting the changes in the structure of public goods supply over different periods. The chapter also examines the impact of fiscal reforms on the provision of urban public goods, including the introduction of the tax-sharing system and the establishment of a modern fiscal system. It discusses the role of social organizations and private enterprises in the supply of urban public goods, as well as the challenges and opportunities presented by the evolving landscape of urban public goods provision. The chapter concludes with an examination of the current state of urban public goods supply in China, offering insights into the future directions of this critical area of public policy.

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4. Chapter 3. Empirical Research on the Supply Mechanisms of Urban Public Goods

   Baijun Wu, Maogang Tang, Zhen Li

   The chapter explores the multifaceted landscape of urban public goods supply, highlighting the evolution and interplay of various supply mechanisms. It begins by examining the traditional government supply mechanism, which has historically dominated the provision of public goods, focusing on pure public goods that are highly public, non-competitive, and non-exclusive. The analysis delves into the market (private) supply mechanism, which is increasingly relevant for quasi-public goods such as infrastructure and network carrier public goods. The societal (voluntary) supply mechanism is also scrutinized, emphasizing its role in expanding supply channels and diversifying supply methods through third-party or non-profit organizations. The chapter further investigates the multi-stakeholder cooperative supply mechanism, which involves collaboration between governments, enterprises, and social entities, and is particularly applicable to the construction and management of various public goods. The empirical analysis focuses on the current situation in China, providing a detailed examination of the factors influencing the supply of urban public goods. It explores the impact of urban economic development, industrial structure, fiscal system, and decision-making mechanisms on public goods provision. The chapter also assesses the efficiency of government and market supply mechanisms, using data from 267 prefecture-level cities in China. The findings reveal significant disparities in public goods provision efficiency among cities, with provincial capitals and major central cities generally exhibiting higher efficiency. The chapter concludes by discussing the implications of these findings for policy and practice, offering insights into how urban public goods supply can be optimized to meet the needs of a rapidly urbanizing population.

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5. Chapter 4. Investment and Financing Mechanisms for Urban Public Goods

   Baijun Wu, Maogang Tang, Zhen Li

   This chapter explores the multifaceted landscape of investment and financing mechanisms for urban public goods, with a particular focus on China's evolving strategies. It begins by examining the evolution of China's public goods investment system, tracing the shift from government-led investments to a more diversified approach involving market participants and social organizations. The chapter delves into the structure of urban public goods financing, highlighting the roles of government fiscal investment, market financing, and multi-stakeholder cooperative financing. It provides a detailed analysis of the government's fiscal budget system, including the division of taxes and the challenges of soft budget constraints. The chapter also discusses the trends and models of various financing mechanisms, such as the 'Government Investment + Fund' mechanism, bond financing, trust financing, and the securitization of infrastructure assets. It offers empirical data on the investment levels and structures of urban public goods in China, revealing the significant growth in public infrastructure and the increasing proportion of non-economic public goods supply. The chapter concludes with a discussion of the issues and recommendations for improving government investment in public goods, emphasizing the need for stronger fiscal budget management, improved budget supervision systems, and the incorporation of social forces in budgeting.

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6. Chapter 5. The Supply Mechanism of Urban Public Infrastructure

   Baijun Wu, Maogang Tang, Zhen Li

   Urban public infrastructure serves as the backbone of socioeconomic activities within cities, directly impacting living standards, productivity, and urban development. This chapter provides an in-depth analysis of the current state of urban public infrastructure in China, detailing its characteristics, functions, and supply mechanisms. It explores the challenges of effectively supplying public infrastructure to meet urban development demands and ensuring its efficient functionality. The chapter also delves into the economic and social welfare impacts of urban public infrastructure, highlighting its role in promoting economic growth, alleviating poverty, and improving the environment. Additionally, it examines the investment and financing mechanisms of urban public infrastructure, discussing the evolution of supply mechanisms and the role of government, market, and social capital in infrastructure development. The chapter also provides a detailed analysis of the operational models of urban public infrastructure, discussing the competitive and exclusive nature of different subsystems and segments, and the opportunities for diverse operational models. Furthermore, it highlights the issues and reform measures in the investment and financing system for urban public infrastructure, providing insights into the future of urban infrastructure development in China.

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7. Chapter 6. Urban Public Service System and Supply Mechanism

   Baijun Wu, Maogang Tang, Zhen Li

   The chapter explores the rapid urbanization in China and its impact on the quality and quantity of urban public services. It discusses the expansion of public service coverage and the increasing diversity of providers and supply methods, while also acknowledging the persistent challenges of insufficient scale, low quality, and unbalanced development. The text is guided by the New Public Service Theory and provides a detailed analysis of the basic characteristics of public services, current challenges, and new perspectives for reform and development. It examines the role of the government in establishing a basic public service system that meets the survival and development needs of all citizens, aligning with the level of economic and social development. The chapter also delves into the connotation and characteristics of public services, highlighting the non-rivalry in service utilization, non-excludability of benefits, and indivisibility of utility. It discusses the major modern public service theories, including New Public Management Theory and New Public Service Theory, and their implications for the supply of urban public services. The text provides a comprehensive overview of the development status of urban public services in China, including the development process, current status, and future prospects. It also analyzes the issues in urban public service supply, such as insufficient reform momentum, ineffectiveness in the supply mechanism, and disparities in the levels of urban public service provision between regions. The chapter concludes with a discussion on the mechanisms for urban public service supply, including government mechanisms, market mechanisms, and multi-stakeholder cooperative supply mechanisms.

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8. Chapter 7. Urban Public Goods Supply Policies and Practices

   Baijun Wu, Maogang Tang, Zhen Li

   This chapter examines the pivotal role of the government in shaping China's market economy, particularly in the provision of urban public goods. It explores the evolution of public policies since the reform and opening up, highlighting three distinct stages: the reform and exploration stage, the exploration and innovation stage, and the institutionalization stage. The chapter delves into the characteristics of these policies, noting shifts from economic growth to comprehensive social development, and from regulation to publicity and people-centricity. It also discusses the transition from government-led to government-society cooperation in policy formulation. The chapter provides a detailed analysis of public policies in public health, public education, and social security, assessing their effectiveness and offering recommendations for improvement. In public health, it examines the evolution of policies from welfare health services to the 'Healthy China' strategy, highlighting achievements in disease control and emergency response. In public education, it traces the journey from universalization to balanced development, emphasizing the government's role in promoting equitable access to education. The chapter also evaluates the performance of these policies, identifying areas for enhancement and suggesting reforms to strengthen the public policy system and governance. It concludes with a forward-looking perspective, emphasizing the need for continued innovation and adaptation in public policy to address emerging challenges and promote sustainable urban development.

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9. Backmatter