Why rent-seeking behavior may exist in Chinese mining safety production inspection system and how to alleviate it: A tripartite game analysis

Lu Liu, Qiuhong Zhao and Yanlin Bi

Resources Policy, 2020, vol. 69, issue C

Abstract: The vertical management structure is widely used in America, Japan, China and other countries for the regulation of mining. However, the safety situation of mining in China is worse than that of America or Japan. Although the vertical management structure has the advantage of relative independence, it also has some drawbacks (i.e. weakening the supervision of vertical management departments). In this paper, we analyze possible problems of vertical management structure in the Chinese mining safety production inspection (CMSPI) system from a theoretical level. It is found that rent-seeking behavior between Local Regulatory Departments of Work Safety and mining enterprises exists within the CMSPI system under situations of fluke mind existing and (or) profit weighing, which may weaken production safety and cause accidents accordingly. Considering the existence of rent-seeking behavior, we construct a tripartite evolutionary game model among the State Administration of Work Safety, Local Regulatory Departments of Work Safety and mining enterprises. In the experimental analysis, we demonstrate the tripartite interaction in the CMSPI system and analyze impact of rent-seeking on it. We show that rent-seeking cost has threshold value. By raising the punishment of illegal mining enterprises or establishing a third-party regulatory department independent of the system, rent-seeking cost can be higher than its threshold, thus the possibility of rent-seeking will be reduced. This paper contributes mainly in two aspects. First, we trail the rent-seeking behavior and its impact on the CMSPI system logically. Second, we propose suggestions, the purpose of which is to effectively reduce rent-seeking and production safety accidents with relatively low regulation cost, and further optimize the CMSPI system.

Keywords: Vertical management structure; Rent-seeking; Decision tree; Tripartite game; Chinese mining safety production inspection (CMSPI) system (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:69:y:2020:i:c:s0301420720308722

DOI: 10.1016/j.resourpol.2020.101841

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