The Principal-Agent Analysis of China Coal Mine Safety Regulations

The purpose of this paper is to solve the difficult problem that coal mine accident cannot be effectively contained by the government´s severe consolidation, and to deal with the main stakeholders´ conflict of interest and information asymmetry in coal mine safety regulation. Systematically, we analyzed the three-tier principal-agent relationships which formed in the coal mine safety supervision and regulation: between the central government and local government, local government and coal mine enterprises, coal mine enterprises and miners, and introduced the incentive compatible mechanism to the coal mine safety regulation, then came up with policy and suggest to restrain accidents. Analysis shows that the establishment of incentive compatible mechanism among three-tier principal-agents can effectively reduce the stakeholders´ conflict of interest and information asymmetry. The application of incentive-compatible mechanism can significantly improve the effect of coal mine safety regulation, so as to solve the puzzle of reducing coal mine accident rate.