Comparative Institutional Theory Of Financial Transition And Case Study Of China:Logical Deduction From The Starting Point Of Outside Money Model

This paper tries to combine Masahiko mainstream Aoki's comparative institutional theory, financial developing theory and the latest fruits about finance of transitional economics together, then this paper develops a framework of comparative institutional analysis on finance transition. By applying the A.M. framework, the part of positive analysis interprets, analyses and forecasts the finance transition in China.1.1.1-6.3.3 constructs the theory, which includs one starting point, three major lines , and two stages.The staring point is the beginning of the financial transition- outside money model. This model is based on the Gurley & Shaw's outside money model. By adding the planned system and applying the conception of "domain", this model brings all the elements needed into "institutionalized interrelated synchronic structure" (Masahiko mainstream Aoki, 2001). As result, we get a framework that makes financial development theory and system transition theory compatible. This framework is a self-supported, self-sufficient and logically consistent arrangement. Each domain in this framework mutually replenished, related and implanted, which conceives a stable structure. In this structure, the allocation of resources is implemented by government intermediary (quasi horizontal administrative level system, quoted transaction & spirit encouragement). The banking system is a part of the government while labeled outside money is an important tool to realize government intermediary."Outside money model" functions as the foundation of the paper, which includes all the elements of financial transition. According to Masahiko Aoki' (2001,P210-270) institution evolution theory (institutionalized and interrelated synchronic structure -subjective game model - institutionalized and interrelated diachronic structure), through logic deduction and theory derivation from "outside money model ", the comparative institutional theory of financial transition has been set up.Three lines run the whole theory.The first line is evolution of bank system: monetary system of government-inside institution banking system-market and multi-element oriented banking system. During this process, the bank system makes a transition from political domain to organization domain, then to transaction domain. Along this line, this paper makes an investigation to the changes of information structure of banking system, market structure, governance structure and the interconnection of banks and firms on information aspect. As a result, theory of financial intermediary and theory of organizational information structure become compatible.The second line is evolution of money: outside-money--inside-money. Along this line, this paper makes a research on the changes of money nature, extension, structure, function, diversification of financial capital; impact on the operation of economic finance influenced by money nature; the rectification function of institution of changing money. This line brings financial deepening theory into the logic framework of institution transition theory.The third line is evolution of resource allocation intermediary: government intermediary-bank intermediary-finance intermediary. Resource allocation intermediary in different stages is corresponding to different financial practices that undergo such a process: from quasi-horizontal administrative level system & quoted transaction to relation style finance, and to market oriented finance. This line binds evolution of financial function and the change of resources allocation together.the two stages of financial transitionAlong the A.M. three lines, from the starting point of outside-money model, the paper begins to study the two stages of financial transition.First stage of financial transition (3-4): The fundamental reasons are government tactical action resulting from changes of ideology crisis and encouragement mechanism, which shows on the change of government, dominated mandatory policies. During this process, government monetary system transformed to inside system banks...