The Predicament And Overcoming Of Government-dominating Logic In The Process Of Rural Institutional Change

During the nearly three decades, the rural reform is a process of institutional change, which is dominated by government. On one hand, we have got so great achievements that attracted worldwide attention. On the other hand, both the"bounded rationality"of government and the path dependency throughout the institutional change, have caused a lot of problems, such as the separation of the urban-rural, the larger gaps between urban and rural areas, the slow growth in peasant incomes, the lag development of social undertakings in rural areas. Whereupon"three dimensional rural"issue has become such a social issue only in China, meanwhile it is becoming the hot and tough one that we concern about.Therefore, either doing a study in the path and nature of rural institutional change or finding the issues and shortages existing in the process dominated by government has critically practical significance and theoretical value to give impetus to the reform and development in China, especially for deepening general reform in rural areas, realizing social transformation and constructing the harmonious society successfully.It has five parts in the dissertation: Partâ… set forth the practical significance and theoretical value of this topic. On the basis of reviewing the related theories of institutional change and analyzing the logic and predicament of rural institutional change in China, the core argument was brought forward:Rural reform in China is a mandatory process of institutional change, the arrangements about a series of formal systems, organizational system and property rights system, etc, have impact on many aspects in rural areas, such as mode of production,urban-rural relations and peasant incomes. The characteristics, mandatorily institutional change reflects, make the government play a leading role throughout the changes. However, due to the"bounded rationality"of government, rural reform encountered these problems, as we have known,"path dependency"and"North paradox". Afterwards, these phenomena, urban and rural sub-system, widening income gap of peasants, the problem of peasant burden and also the lag development of social undertakings in rural areas, finally resulted in the"three dimensional rural"issue, that is, inefficient agriculture,lagging rural areas and poverty-stricken peasants. For the purpose of resolving the tough issue fundamentally, we have to overcome the predicament, which means institutional change led by government. Then the approach is vigorously promoting the rural institutional innovation, actively cultivating a new main-body of institutional change, altering the developing preference of government, conquering the rigid ideology. Hereafter we could pull the rural institutional change into the path of evolving rationalism in order to achieve the effective unity between government-dominating and natural evolution.In partâ…¡,the writer analyzed the theories of institutional change and the issues on the path choice from the perspective of literature review: First of all, the writer summarized the origin and connotation of institutions and the institutional changes; secondly, discussed two different paths and the choice of each of them, attaching importance to sort out the connotation and differences between constructing rationalism and evolving rationalism. At the same time, questioned the strategy and possibility of path choice in the process of institutional change; finally, defined the main-body and motion under the different paths.Partâ…¢expounded the government-dominating logic of institutional change and its function in the process of rural reform in China. By combing out the history and features of rural institutional change, the writer explored the logic and how it makes the dual influences on the institutional changes.The rural institutional change in China has gone through three stages in the nearly three decades: Firstly, the reform of rural business, which has its core of home contracting business. Secondly, national income distribution reform, which has its core of reform of rural taxes and fees. Thirdly, comprehensive reform in rural areas, which has its core of promoting the reform of rural superstructure.The characteristics were reflected in the following five aspects: Firstly, as far as the procedure of the institutional change and reform are concerned, they are the combination of"bottom-up"and"top-down". Secondly, about the way of reform, it is the combination of incremental revolution and marginal innovation. Thirdly, on the main-body of reform, it is the combination of peasants and government. Fourthly, the order of reform is the easier part first following the more difficulty one; firstly trying and then spreading; reform of economic system first and then that of political system; external first and then center. Fifthly, the motivation of reform is the turn of the role of internal induced factors and mandatory institutional change.The rural institutional change is a type of"top-down"one, with the government as the main-body. In the social competition between the two different institutional arrangements whether the government is regarded as the main-body or not, government is in a dominant position, owing to the confrontation of political forces and the power of the allocation of resources. Therefore, government is a monopoly of supply. At the same time, who decides the orientation,speed,form and even strategy arrangements of system supply is also the government.There are four aspects that declare the government-dominating logic in the process of institutional change: Firstly, it is the government who set up the basic direction and principles of institutional change; Secondly, it is the government who took part in the institutional supply by means of laws,regulations and the policies as a institution supplier; Thirdly, it is the government who put up the barriers participating in the system, restricted micro-main body of the activities on institutional innovation; Fourthly, it is the government who released the condition of system access so as to promote the occurrence of induced institutional change and improving the standardized and institutionalized level.As a matter of fact, the government took a positive role in the institutional change on the other hand, the following aspects could confirm the argument: First of all, defining the path of institutional change by government made the evolution carried out in a relatively stable circumstances, which avoided large fluctuations. Secondly, resolving the lack of systems, but to supply the arrangements in the process of institutional change rapidly. What's more, reducing the costs of system arrangements. However, the limitation of this also reflects in these three aspects: Firstly, it is too difficult to apply the"top-down"institutional change in all of the places and fields. Secondly, this mode inhibited the institutional change of voluntary co-operation naturally. Thirdly, too much power the government owned that brought about the situation of rent-seeking systems.Chapterâ…£focused on the plight of institutional change led by government, the writer expounded from the following four points:The first aspect is the lack of systems in the process of rural institutional change. Take household registration system for example, as the most important one in the formation of urban-rural dual structure, the formulation of this system, is rooted in the benefit tendency led by government. Furthermore, the lagging situation of reform in the household registration system just gave an expression of the practical plight this mode has to face.The second one is the"path dependency"of the government-dominating mode. By virtue of the government-dominating reform, which resulted in the system lock status, the original systems were strengthened and the institutional innovations were stopped. Thereby, the rural systems lasted along where the original systems went, like inertia. Although"three dimensional rural"issue has attracted so many attentions, after several years of efforts, some progress has been made, but we must break the"path dependency"fundamentally.The third one is the relationship between government-led mode and the"North paradox". The writer expounded the theoretical connotation of"North paradox", argued that"North paradox"is just the true reflection of the plight caused by institutional change led by government. In the three decades of reform and open-up in China, the government always confronts the weighing and choosing dilemma from the output and rent maximized."Three dimensional rural"issue coming into being is the result that the government pursuing the output maximized at the cost of the peasants'benefits.The forth one is the plight that institutional change led by government in case of institutional conflicts. The path directed by tool rationalism is almost the innovation for formal systems. But the difference in characteristics of formal and informal institutions themselves is the decisive factor to make the path be another evolution rationalism. The government-dominating mode could hardly be significantly effective in the change of informal institutions. Confronting the contradictions between formal and informal institutions, the institutional change mode led by government is always troubled.Partâ…¤is the conclusion of this dissertation. In this chapter, the writer discussed the theoretical connotation and main-body choice of institutional innovation first. Next expounded the advantage and disadvantage about the institutional innovation dominated by government. Explored the path choice in order to resolve the"three dimensional rural"issue and also promote the remodeling of main-body of institutional innovation at last. Argued the countermeasures for giving impetus to rural institutional innovation, that is, Changing the developing preference of government, remodeling the main-body of institutional innovation, breaking the"path dependency"thoroughly, getting rid of the"North paradox", attaching importance to the institutional conflict and its coordination. Paying equal attention to formal and informal institutional innovations, making central and local institutional innovations be parallel, combining the core and supporting institutions innovations, even the own-type and reference-type as well.All in all, we should deepen the comprehensive reform in rural areas,complete the supporting systems and avoid institutional conflicts so as to create a better institutional environment for resolving the"Three dimensional rural"issue .