Public Service Model in Planned Economy Period: Citizen as Producer

During the three decades from 1949 to reform and opening up event in 1978, in a strict sense, there seemed to be no real public service delivery organizations or systems. Public service delivery in urban areas was mainly conducted by workplace^②, and in rural areas, it rely mostly on people's communes, which was typically summarized as the urban-rural dualistic public welfare system with Chinese characteristics.

2.2.1 Urban Areas: Workplace Welfare

“Workplace” (dan wei) is known as a unique concept with strong Chinese

① Kang Shaobang, Research on China’s Social Public Service System, Party School of the Central Committee of CPC Press, 2008, pp. 10-4.

② There is no uniform translation for “dan wei”, besides workplace, work community, and work unit are also common translations.

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characteristics, existing in socialist political system and planned economy system. By and large, researchers generally interpreted “workplace” from two perspectives, one is political control and social integration, for example, Lu Feng believed that all kinds of micro-social organizations could be viewed as workplace, a central system of society regulation closely integrated with the party and the state system, that is, by controlling the workplace, the state achieved the goal of individuals control.^① From the perspective of resources allocation, as Liu Jianjun put it, under the condition of insufficient total social resources, authority, by virtue of workplace, was forced to compulsorily extract and distribute resource to achieve modernization.^② Li Lulu argued that workplace was a kind of organization bearing a variety of functions, such as resource allocation, division of labor and livelihood security, and government agencies, public institutions and state-owned enterprises all belong to workplace.^③

Workplace provide its members medical care, housing, pension, education, and other various welfare subsidies and allowances, all of which were also accessible to even the children of employees. For example, a lot of workplaces have their own subsidiary kindergarten, the job position of can be taken by his children when the employee retired. To some extent, a workplace seemed to be a small “welfare state”.

Sheltered by the workplace, urban workers seemed to enjoy relatively extensive and stable welfare security. Put it another way, to be a workplace person probably implied the entitlement to the urban welfare. Under the planned economy, in actual, the business risk would ultimately be paid by the government, more exactly, the state, who alleviated the welfare burden of enterprises through providing budget allocation or financial subsidies.

2.2.2 Rural Areas: “Collective Welfare”

Since the founding of PRC, in rural areas public goods provision was initially

① Lu Feng, Danwei: A Special Form of Social Organization, China Social Sciences, 1989 (1), P. 78.

② Liu Jianjun, The Building of China’s Danwei System and the Intergradation of “Society after Revolution”, Journal of Yunnan Administration College, 2000 (5), p. 25.

③ Li Lulu, M iao Dalei, and Wang Xiuxiao, M arket Transformation and the Evolution of “Danwei”: Re-Study On

“Danwei” Research, Society, 2009 (4), p.3.

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accomplished by “mutual aid group”, which later developed into primary cooperatives, advanced cooperatives, and eventually the people’s commune in 1958, from then on, in rural areas, the supply of public goods and public services relied entirely on people’s commune.

By examining the origins of people’s commune, some researchers have concluded that the people’s commune movement could be treated more as “a rural social and economic reform” intentionally launched by central leadership group than some kind of spontaneous behavior of farmers. Originally starting from the construction of water conservancy in the winter of 1957, this massive movement seemed to require central planning and design, along with a large amount put of labor, fund and resources, as a result, the old small- scale cooperatives would probably not enable the development of farmland irrigation and agricultural mechanization.

Simultaneously, commune-run industry was scheduled, in consequence, a variety of small-sized plants suddenly turned up, such as framing tools plants, fertilizer plants, small power stations, steel plants, cement plants and so on.

It is argued that water conservancy construction, industrial construction, along with pumping out steel unprecedented ly resulted in a shortage of rural labor, leading to the emergence of various types of public canteens, thus the functions of the rural cooperatives were increasingly expanded. Since then, the state assigned education functions to cooperatives, and a large number of nurseries, kindergartens, agricultural primary schools, and agricultural technical schools set up. Finally, under the call of “a nation of all soldiers”, in rural areas the semi- military organization “people’s militia”

was widely established. Therefore, the five fields of institutional innovation, industry, agriculture, commerce (exchange), education, and military might directly give birth to the people’s commune system.^①

All told, since its establishment the people’s commune has assumed the function of public goods supply, and under the system of integration of government administration with commune management, the commune supply was actually

① Xin Yi, System Innovation and the Origins of Rural People’s Commune, Journal of Shandong Normal University, 2003 (6), pp. 101-4.

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government supply. Some scholars have put forward that despite multiple reasons for the emergence of people's communes, there is no reason to neglect “institutional change of public goods supply in rural areas”, that is, from the mutual aid group, to cooperatives, and then to the people’s communes, this process, in fact, may be regarded as a kind of institutional change of the way of public goods supply, from private supply, to cooperative supply, and then to collective supply and government supply.^①

People’s commune was both political and economic organization. All the means of productions were owned by the “three- level” organizations, namely communes, production brigades and production squad, with the combination of the “free supply system” and the “work point” system as the distribution system. The “free supply system” chiefly means that all the expense of the commune’s members, dressing, food (public free canteens), housing, education, medical and healthcare, weddings, funerals, would be afforded by the commune, actually, many of these items seem to be the

“public service” we are talking about today. The “work point” system usually means that the farmers were supposed to earn work points, which can be used to exchange for the necessities of life, by selling their labor to the collective organization. It can be seen that farmer under the collective labor system, or called member of the commune, possessed neither means of production, nor authority for management, nor surplus funds, hence, the supply mechanism of public services in that era was at best one kind of top-down mechanism almost without any need expression or need channel. Equally, farmers could hardly have certain clear awareness of public services need, or any right or motivation to make choice of public services they were in need of.

In addition to the one-way supply of public services, some scholars have summarized three other characteristics of rural public service policy during the people's commune period: First, the top-down decision- making system overwhelmingly dominated by the government. Specifically, the county government as the top decision- making body would give orders to people’s commune, and a

① Guo ruiping, The Explanation of the Origins of People’s Commune from Perspective of Institutional Economics:

Based on the Perspective of Institutional Change of Rural Public Good Supply, Journal of Northwest University, 2005 (11), p. 63.

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number of executive committees under the commune, such as water station, grain station, hospitals, broadcasting station, agricultural economics station, and agricultural technology station, would be responsible for providing public services to farmers in accordance with the instruction of the county government. Furthermore, only limited funds resources can be depend on, with tax revenue and modest commune collective funds as the two main resources, which might lead to poor quality public service.

Finally, the farmers seemed unaware of their individual sharing proportion of the public service costs, which essentially a certain potential risk of the system.^① More specifically, distribution system under the commune system was to deduct all public expenditures from the collective funds first, and then determine the individual possession, in other words, costs of public goods were indeed afforded by farmers but were unlikely to be felt by them. After the disintegration of the people’s communes, by contrast, the farmer losing collective shelters had to individually and directly face a variety of public service charge agencies, thus their feelings about the “monetization”

of public service seemed to be suddenly aroused.

In summary, the feature of China’s public service delivery mechanisms in planned economy period could be summarized as “vague”, with rather low specialization degree, having neither specialized public service providers, no r special public service funds, dissolved into urban “workplace system” and rural “people’s commune system” to a large degree. Under this situation, the government may not to bear too much pressure of public service supply, public services, however, seemed far from satisfactory in quantity and quality. In addition, paralleling to the top-down structure of “workplace system” and “people’s commune system”, public service delivery also seems to be a one-way approach, and citizen participation could hardly be seen in the whole process. It can be maintained that in urban areas or in rural areas, citizens’ awareness of modern “public service” seems to be rather ambiguous. Or, compared to “public service supply”, “public service distribution” may be more accurate to label the characteristics of public service mechanism in that era. To some

① Fang Kun, Research on Contemporary China’s New Rural Public Service System: Based on the Framework of

“Service Triangle” Model, China Social Sciences Press, 2010, pp. 102-3.

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degree, public service could be viewed as a sort of reward to the citizens for their production activities

2.3 Public Service Model in Market Transition Period: Citizen as