Supervising the economy instead of directing it

The government, while handing over the decision-making power to enterprises, has to simultaneously step up its supervision of their business activities. Shifting the governmental role benefits enterprises in the following ways:

It is firstly for the good of enterprises' long term interests. For example, many countries have an anti-monopoly law, and it is meant to ensure an enterprise's sustainable development.

On another note, it helps to legalize economic activities. The notion of a market economy did not form out of thin air; while allowing companies to independently deal with each other, the government has to exert regulatory powers to ensure every business is done lawfully.

Finally then, the government has to be a supervisor. Enterprises are fundamental parts of society; all their economic activities will have an influence. For the public's interest, the government has to ensure all companies have social responsibilities through safety control, quality control and fight against corruption.

Reform, therefore, means more than merely setting up a bigger office that can seat the staff from all previous scattered agencies. The purpose of creating bigger ministries is to downsize the government while making it more efficient. Yet failing to truly empower the business sector, and the society at large, no matter how power is reorganized and restructured among the ministries, it still runs from within the government. The government still has to manage everything and in the end, this will benefit neither.

The author is a professor with and director of the East Asian Institute, National University of Singapore.

This article was first published in Chinese and translated by Chen Boyuan.

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