Page 136 - JOURNAL OF LIBRARY SCIENCE IN CHINA 2018 Vol. 44

FU Caiwu & YUE Nan / Restrictions on incremental financial investment in the construction of 135
modern public cultural service system: Based on investigations of county public libraries

sensitive to supply mode and quality of public cultural products, because they are restrained by
accumulation of personal cultural and economic capital. This survey result also shows that there are
diverse impact factors existing between state supply of public cultural products and actual behavior
of personal cultural consumption. Realization of personal cultural consumption is an outcome
of decision-making based on various factors. The efficiency of fiscal investment is seriously
restrained by residents’ personal conditions (especially personal cultural capital). Reducing cost
of cultural participation by increasing investment, improving facilities of cultural venues and
enhancing accessibility to them, and improving supply mode and quality of public cultural service
can have certain active effect or positive impact; but they are not decisive or principal factors.

3.2.2 Institutional reason: increase of institutional cost in the cultural field and failure of incentive
mechanism have affected the performance of public libraries
Zhou Qiren(2017) proposed the definition of “institutional cost” by drawing upon from the
definition of “transaction cost” in Western institutional economics and the definition of “pure
commercial cost” coined by Chinese development economist Zhang Peigang. “Institutional
cost” can be used as a tool to analyze the reform of the country’s cultural system. In discussions
about public policies, the issue of “institutional cost” in the country’s cultural field has been
always overshadowed by “production cost” and “reform cost” (Cai, 2013). But institutional cost
is not entirely equal to production cost nor reform cost. Production cost refers to all costs that
must be paid in producing public products, among which management cost is overlapping with
institutional cost. But production cost is not equal to institutional cost. Reform cost refers to
various costs needed to be additionally paid when the government advances for-profit cultural
institutions’ transformation into enterprises or when a public institution changes its status (such as
endowment insurance, medical insurance, depreciation of fixed assets and taxes paid). It overlaps
with institutional cost, but does not include costs related to “regulation, approval, and restriction
and prohibition of laws and policies, as well as concepts, public opinion and public policy debates
desirous of changes in those variables”. Institutional cost can become a tool to analyze the
performance of the cultural sector and help deepen managers’ macro understanding of the reform
of cultural system.
The reason why institutional cost has become an important factor restricting the performance
of public libraries is because the state has set strict sector barriers by establishing the system of
the cultural sector and directly allocates resources through the sector system. Institutional cost is
essentially different from market transaction cost on the basis of voluntary selection of resources.
Administrative power directly participates in and leads the operation of complexes of cultural
production and consumption (cultural institutions). Institutional cost is endogenous to the operation
process of complexes and directly constitutes operation cost of the system of the cultural sector.
Public libraries have also been in the general context of transformation from planned economy
to market economy over the past three decades or so. The hierarchical system and the mode of