LI Rui，etc：Synergy Between Market and Government——A Third-Party Evaluation of Active Labor Market Programs

Abstract：Public programs involve both market and government.Market pursues efficiency while government focuses on equity, therefore employing a single index to evaluate performance is inappropriate.In this paper, we build a third-party evaluation framework for public programs, adopting double standards.We use income performance to evaluate market efficiency and satisfaction to evaluate government equity.In order to overcome the selection bias in performance evaluate, we apply a bivariate selection model of market and government and confirm the roles of different subjects on programs selection; we bring in selection models to performance evaluation models so as to get the unbiased estimation of programs performances.Based on 2008 survey data of World Bank, we evaluate active labor market programs and find programs' average subjective and objective effects are in the same direction under assumption of homogeneity; once essential heterogeneity is considered, there are significant differences in subjective and objective effects among different programs and individuals, and income increase does not cause a corresponding enhancement in satisfaction.To respect market selection can better ensure the allocation efficiency of fiscal funds; however, government dominating programs selection can notably enhance the subjective satisfaction of the underprivileged, thus promoting social justice.

Key words： Resources Redistribution    Third-Party Evaluation    Bivariate Selection    Satisfaction    Essential Heterogeneity

source:Finance & Trade Economics ,No.3,2015