The Equilibrium of Public Service - An Analysis from the Perspective of Local Government

Abstract

Public service is a special mission, which is to resolve public issues involved the whole community. However, given the goals of building a harmonious society evidence shows that investment on public service in China is still insufficient. This article explores the incentive of local government on public service. Using game-theoretic framework this paper analyzes the possible strategies and payoffs of the three kinds of players in public service game to conclude a Nash equilibrium in the domain of public service. Furthermore this article discusses the harm of this equilibrium to the whole society and the possible methods to resolve this problem, points out that to realize the goals of "development with equity" specific reform should be introduced to break this self-enforcing equilibrium.