Incentive Regulation:A New Development Trend of Governmental Regulation

Under the influence of capture theory of regulation and deregulation movement,incentive regulatory theory came into being in order to enhance the effectiveness and decrease the costs of regulation.Incentive regulation focuses on how to design the stimulating mechanism and tools for boosting enterprise's productivities and effectiveness.The main tools of incentive regulation consist of franchise bidding regulation,yardstick competition regulation,price caps regulation,social contract regulation and so on..Accompanied with the separation of government from enterprises and deregulation in China,it's necessary to reform current regulatory system and make use of incentive regulation.