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| Economic Analysis of Administrative Monopoly: on its Root, Loss and Eradication |
| XU Xin-hua, LUO Qing-he |
| City College, Dongguan Polytechnic, Dongguan, Guangdong, 523419; College of Economics, Shenzhen University, Shenzhen, Guangdong, 518060 |
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Abstract Economic monopoly does not necessarily restrict or exclude competition. On the contrary, in some cases, economic monopoly may promote economic competition and take it to a higher level. However, it is impossible to find a symbiosis of economic monopoly and market competition between administrative monopoly and market competition. Administrative monopoly only leads to low-efficient resource configuration. From the perspective of regulation economics, the root of administrative monopoly lies in that interest groups always seek to maximize their interest. From the perspective of institutional economics, administrative monopoly has its root in path dependence of the gradual transition of China's state-owned property and the streamlined arrangement of
transaction costs. Like economic monopoly, administrative monopoly also causes the general loss of net surplus and "X-low efficiency". In addition, in practice, in comparison with economic monopoly, administrative monopoly causes extra losses, including obstruction of economic freedom, excessive competition, weak technological innovation and rent-seeking, etc.. To reduce or break monopoly, we need to change from administration-oriented governance to market-oriented governance, separate enterprises from the government in terms of functions, break administrative monopoly rather than grant exemption to it, and realize the transformation from political conservatism to political innovation.
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Received: 20 January 2015
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2015, Vol. 32 
