Villager Groups and Self-Governance in China: Power, Incentives, and Risk Prevention

Building a modern grassroots governance system synchronized with national development has become a significant part of China’s rural revitalization strategy. To cope with the overlapping of property rights, social identities, and work and living space in China’s villages, the villager group 村民小组 has been endowed with relatively complete governance power. Regional social networks, the moral constraints of reputation in the village, and the administrative incentives provided by the government constitute the incentive structure of villager group governance. At the same time, granting group cadres official authority and social power enables them to better coordinate the relationship between state and society, safeguard the rights and interests of villagers in the group, and provide low-cost public goods through their structural position in “the last kilometer” 最后一公里. However, they may also bring about the political risk of group confrontation, the economic risk of embezzling collective assets, and the moral risk of negligence and political inertia. To ward off these risks requires strengthening the leadership of grassroots party organizations, making full use of social supervision, ensuring that cadres operate in an open and above-board fashion, and introducing the notion of the rule of law, thus forming a compound risk-prevention mechanism for grassroots power and building a solid foundation for national governance.

Dynamics of Funding Liquidity and Risk-Taking: Evidence from Commercial Banks

The purpose of this study is to investigate the impact of funding liquidity risk on the banks’ risk-taking behavior. To test the hypotheses, we apply the two-step system GMM technique on US commercial banks data from 2002 to 2018. We find that funding liquidity increases the banks’ risk-taking of US commercial banks. Furthermore, banks with higher deposits are less likely to face a funding shortage, and bank managers’ aggressive risk-taking activity is less likely to be monitored. Our findings infer that increases in bank funding liquidity increase both risk-weighted assets and liquidity creation, and deposit insurance creates a moral risk issue for banks taking excessive risks in response to deposit rises. The relationship between funding liquidity and the banks’ risk-taking varies with their capitalization and market conditions; the impact of funding liquidity on risk-taking is pronounced for well-capitalized banks and the Global Financial Crisis 2007. Our tests are robust for the usage of alternate proxy of funding liquidity and by controlling economic conditions. The findings of this study have implications for regulators to develop guidelines for the level of liquidity and risk-taking of commercial banks.

Moral Risk

This chapter examines the connections between thought and harm from an ex ante perspective. It asks whether the antecedent risk that a given belief, attitude, or fantasy will have a harmful impact on another is ever high enough to render that thought impermissible. The kinds of harms that are discussed include the frustration of others’ private desires, the infliction of offense and hurt feelings, and various forms of economic and physical damage. The chapter’s conclusion is that while the risks that are posed by some thoughts approach the permissibility threshold, none actually crosses the line.

Problems of functioning of the insurance services market in the conditions of COVID-19 distribution

In the center of contradictions and risks, as well as structural changes in the socio-economic system of the country due to the spread of COVID-19, the development of the insurance market will depend on its adaptation to environmental variability, ability to carry out permanent institutional and organizational transformation, optimization of business processes and introduction of innovative insurance products and services. The purpose of the paper is to develop new approaches to substantiate the dominance of the insurance market in a pandemic conditions and to outline prospects for its progress. The problems of functioning of the insurance services market in the conditions of realization of risks as a result of coronary crisis are considered, which is confirmed by the data on the dynamics of unprofitability of insurance products and refusals to pay insurance indemnity. The parameters of uncertainty of the quality of insurance services are identified, the trends of functioning are tracked, the threats for the parties during the performance of the insurance service are determined. This has greatly simplified the methodology for assessing quality in “regression selection”. Losses from business interruptions caused by the spread of COVID-19 are not covered by standard insurance contracts. In addition, pandemics are an extreme type of risk. Insurers generally clearly prescribe a pandemic as an exception, therefore do not intend to cover them with insurance policies, which provides protection against business interruption and do not include a premium for them in the policy value, without forming reserves for their coverage. It is substantiated that one of the ways to minimize moral risk and regressive selection of both insurers and policyholders in the context of the spread of COVID-19 is the widespread use of insurance protection and decency, which is inherent in highly developed business. This is especially true for insurance services and financial products, which are difficult to assess directly at the time of purchase.

Self-Cultivation and Self-Absorption

This chapter argues that self-cultivation, as a virtue, can be successfully distinguished from a morally problematic kind of self-absorption. Indeed, we need such a virtue in order to explain just those situations in which agents really should think about their own character, and not merely the goods that the traditional virtues are directed toward, when deciding what particular actions to undertake. In particular, we need such a virtue to give a plausible account of how an imperfectly virtuous agent should act when confronted with what I shall call a situation of moral risk. But while imperfectly virtuous agents confronting such a situation should think about their own character, that is not all they should think about. Introducing concerns about the character of the self at the level of explicit deliberation as the target of one virtue among others rightly captures this fact.

Managing moral risks in medical insurance from the perspective of development of medical informatization

The subject of this research is the methods of managing moral risks from the perspective of development of medical informatization, which allows maintain efficiency of medical insurance and lowering medical expenses. The authors meticulously examine the problem of growing medical expenses in China, concept of moral risk in medical insurance, as well as causes for emergence of moral risk in medical insurance. Analysis is conducted on the history of development of medical informatization and functionality of information system of medical insurance in China. The question as raised on application of general information system of gathering vast amounts of intersecting data in medical insurance. The article employs method of scientific cognition of theoretical and empirical levels. The theoretical base for this research is comprised of works of Chinese and foreign scholars on the issues of moral risks in medical insurance. The scientific novelty consists in development of a moral risk management model in medical insurance on the background of informatization of medical service. A conclusion is made that moral risks in medical insurance are tightly connected with the asymmetry of information in subjects of insuring. Medical informatization became a very important means for moral risk management in medical insurance and has great prospects for increasing efficiency of the work of medical facilities.