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Table 1 The two-sided authority of the government

From: The allocation mechanism of authority and accountability in Chinese government hierarchies: A case study of the “Earmarked Project System”

  Production Extraction
Small size Solve market failure Supply public goods National defense Legal order Property rights Stability Public Health Promoting social equity and protecting the poor Antipoverty Eliminating diseases Taxation; Strict budget constraint and supervision
Middle size Solving externality: Elementary Education Environment protection Control monopoly: Law of public service Policy of antimonopoly Information regulation: Insurance Consumer protection Providing social insurance Unemployment insurance Unconditional grants Unfixed income; Extra-budgetary income ; non-budgetary income ; “Implicit Tax”
Large size Coordinating private activities Promoting market Multiple regulations Redistribution: Asset redistribution Comprehensive extraction Interests Human capital State as a super company
  1. Source: Adapted from World Bank 1997