Developing social organizations is the key to finding the right balance of governance

The British magazine The Economist once published a special report titled "Taming Leviathan" in which the problem of governments becoming bigger and more inefficient was discussed. It cast China's efforts in reforming social organizations in a favorable light and praised the country's achievements.

Why would The Economist, a very influential publication politically and economically, pay such attention to China's reform of social organizations?

Of course, the global background needs to be considered. After the 2008 financial crisis, governments, especially those of developed economies, started to take all sorts of measures to cope with the impact of the crisis. This resulted in a revival of the idea of big government.

The special report's central argument was that governments everywhere are like Leviathan, becoming people's masters rather than servants. The article spoke of the disadvantages in enlarging government intervention in economic development.

In 2009 Japan's government spending accounted for 39 percent of the country's GDP. For the US the figure was 42 percent, for Britain and Germany 47 percent, for Switzerland, Austria and Italy 52 percent, and for France 56 percent. The average gross debt burden in OECD countries was more than 100 percent of total GDP. The sovereign-debt markets are fearful that what has happened in Greece or Ireland economically will happen elsewhere, and every government, even that of the US, is under pressure to produce a credible plan to shrink its deficit.

It is fair to say that the return to popularity of the idea of big government is a response to the global financial crisis. Bigger government means more government powers and more capacity to deal with the crisis, which in turn leads to more government intervention in the economy. The return of big government may have a significant impact on the global political and economic structure.

In fact, after the crisis there was a tide of criticism of big government, and that played a role in elections in countries including the US and Britain.

In the US, the Tea Party movement strongly influenced the congressional elections in 2010 as it criticized rising taxes and excoriated the federal government over its deficit.

In Britain the same year, the election victory of the Conservative David Cameron was largely due to his core policy of establishing a "big society" to change the management style of government, handing more power and capital to private groups, charity funds and civil organizations.

The Chinese government, in its efforts to deal with the financial crisis, also implemented a series of stimulus measures to maintain stable growth. The measures were effective and helped the country to become one of the key engines of the global economy. At the same time, the central government did not seize the moment to increase its power. On the contrary, it has maintained its reform path toward "small government, big society" by nurturing the importance of social organizations.

The report of the 18th National Congress of the Communist Party of China said deepening economic structural reform is crucial.

"The underlying issue we face in economic structural reform is how to strike a balance between the role of the government and that of the market," the report said.

Social organization is an important link in balancing the government-market relationship.

First, to transform governmental functions, social organizations have to develop. Defining the boundary of government and the market is the most important issue of China's economic structural reform. Similarly, a clear definition of the boundary between government and society should be one of the most important elements of the country's social structural reform.

Over the past three decades China's reform has essentially focused on making room for the market to develop. There is no doubt that the market has made a big difference in China's economic structural reform, especially in optimizing the distribution of market resources.

However, over the next three decades the government needs to make more room for the society to develop. China should reinforce social construction and nurture the growth of social organizations. Such organizations should be developed in the way private enterprises used to do that. "Small government" means the government should intervene in the country's economic and social activities to a minimum. The government should pass to the market and society the responsibilities that ought to belong to them.

Second, some roles of the public service can be realized through social organizations. In the past, the government has performed poorly in providing public services and solving problems related to people's livelihoods. So efforts to improve public services need to be stepped up.

However, the government should not use the chance of providing better public services to broaden its scale of power. It should not - indeed cannot - take on everything related to social services.

With the development of China's economy, the government should also pay close attention to the reform of government itself. Although the government will get richer the better the economy does, its power should not expand; social organizations will be on hand to take on new roles.

If the government can make more room for social organizations to develop and provide public services, traditional bureaucratic practice can be removed. Competition among social organizations can maximize the effectiveness and efficiency of social services, and provide the best services to citizens.

Third, social organizations can help improve the development of China's efforts of promoting the rule of law. The rule of law is the basis of social management and means government should have a small role in society.

The law should be the standard for evaluating the actions of government and citizens. Society should also be run under the rule of law to ensure the country is run under standards and rules.

The biggest disadvantage in the traditional patterns of social management is that many people defer to government power believing it is absolute, neglecting society's function of self rule.

Only by developing social organizations and building a society based on the rule of law can we make real progress. In fact, fully developed rule of law is contingent on developing social organizations.

Finally, social organizations can help develop the country's democracy. China is striving to promote democracy, and developing different kinds of social organizations can help gather people of different interests to take part in the mechanism and make their voices heard. That could effectively reduce social conflicts. In an orderly way, social organizations could organize citizens to take part in managing the country in social and political perspectives. In that way the country's democracy will be further promoted.

The author is executive vice-president of China Development Institute based in Shenzhen, Guangdong province. The views do not necessarily reflect those of China Daily.

(China Daily 01/18/2013 page10)