Supplementary information:
Investment in public welfare projects refers to investment in projects that meet the needs of the public. Generally speaking, public welfare investment projects include projects with all assets in non-production and operation fields, such as national defense, administration, justice and other departments, as well as projects in the fields of culture, education, science and technology, sports, health, environmental protection, radio and television, social groups and so on. Public welfare projects have the characteristics of non-exclusive consumption and difficult charging.
I. Types
Investment in public welfare projects can be divided into two categories:
(1) Class I is free for public consumption, such as public roads and urban beautification.
(2) A kind of paid consumption for the public, such as public schools and cultural facilities.
Second, the characteristics
Compared with basic investment projects, investment in public welfare projects has the following characteristics:
1. Government subjectivity of investment
The result of investment in public welfare projects is to provide more and better quality public goods for the society, and most of them are pure public goods, which determines that the market is "out of order" in providing public welfare projects, and the government should "do something" and bear the investment responsibility. Of course, the possibility of individuals or enterprises investing in the form of donations is not ruled out.
2. Unproductive operation in the investment field
Although the investment scope of basic projects is wide, they have one thing in common-they are all in the field of production and operation, and the assets formed are used for production and operation activities. The investment in public welfare projects is different, and most of the assets formed are in non-production and operation fields, which is highly non-profit.
3. The source and use of funds are free.
Most of the funds invested in public welfare projects come from financial funds, which are free of charge; At the same time, corresponding to the characteristics of the source of funds, the use of most public welfare projects is also free, and services are provided to all members of society free of charge.
4. Indirectness of investment cycle
The assets formed by public welfare projects are the basic conditions for providing public goods to all members of society, or public goods with only social benefits but no economic benefits, so it is difficult for the projects themselves to generate income streams; However, the significance of such projects lies in providing hardware and software facilities for economic and social development, reducing the transaction costs of enterprises and residents, and increasing future financial capacity by expanding the tax base. Therefore, the investment cycle of public welfare projects is indirect.
Third, economic analysis.
(A) public welfare projects are the areas that the government should first ensure.
According to the analysis of public goods theory, most of the assets formed by public goods investment belong to the category of pure public goods. Judging from the extensive contents of public welfare projects, investment in national defense and political facilities is a necessary material condition for safeguarding a country's sovereignty and territorial integrity, maintaining normal economic and social order, and safeguarding property ownership. The government's investment in science and technology, education, culture, health, sports and other departments is closely related to the development of human resources and knowledge economy and the welfare level of social members, and plays an increasingly important role in modern economic and social development. At the same time, due to the external effects in these areas, the market cannot provide the best resource allocation, and public welfare project investment should be the first choice and priority for government investment.
(B) The cost-benefit analysis of public welfare project investment is relatively difficult.
As mentioned above, although the cost-benefit analysis method is a good way to determine the investment project, it requires a more accurate prediction of the cost and future income of the project; For public welfare projects, although their costs can be accurately estimated, the benefits after their completion are mainly social benefits, and the benefits of most projects are difficult to measure, so it is difficult to analyze their costs and benefits. When making investment decisions, it is ideal to choose the method with the lowest cost.
(3) Investment in public welfare projects is often unbalanced in structure.
The main reasons for this phenomenon are:
1. The government's investment in a public welfare project depends on the political pressure caused by its shortage.
2. If there is not enough constraint on the government's exercise of power, government investment often only pays attention to investment and ignores the investment effect; The government will spend too much on investment projects directly related to its own interests, and often pay insufficient attention to investment in certain fields. For example, the traditional view is that investment in education and health is regarded as government consumption expenditure, not investment in human capital development. When the budget is difficult to balance and the development goals such as education conflict with other government goals, investment such as education often becomes a soft goal. Even if the government fully realizes the importance of education investment, due to the existence of government failure, action is likely to be placed as a secondary goal and ignored.
3. Public welfare projects are obviously affected by the "election cycle", and projects that pay investment costs in a short time and achieve obvious investment results are often more popular. Because the term of office of government officials is limited, and the new round of "post" competition is often fierce, this will inevitably lead to the "short-sighted" phenomenon of decision-making. As Samuelson summed up: when the scheme can enhance the immediate interests rather than the long-term interests, it is easy to be adopted and put into practice quickly; Long-term investment in basic education, soil and water conservation and environmental protection. Although everyone knows their importance, they will not "pass easily". Even if they are adopted late, they will not get enough financial support in implementation.