| Since World War â…¡, state transition and institutional change have been extremely active worldwide. Under the guidance of the "Washington Consensus", the Latin American countries won10years of rapid development, and experienced a "lost decade" simultaneously. In Asia, while Malaysia and Thailand have kept stable in political and social areas in the pursuit of a democratic market-oriented economy, Indonesia has repeatedly experienced abnormal alternations of political power and social conflicts, and its economic development was worse than the neighboring countries. Both Russia and China have gone through the process of transition and Russia has experienced a "lost decade", but China has won30years of rapid development.For China, the great achievements of30years' reform and opening-up have made us understand the benefits of market-oriented economic system and brought us valuable experience of "trial and error" and "reform step-by-step". While acknowledging the great success, we should reflect on whether the existing institutional arrangements are sufficient to ensure a steady and sustainable development. Can we avoid stepping the footsteps of "middle income trap" having occurred in Latin American? Do we have the confidence to perform good and ahead in the next30years in face with the momentum of development in India? From the new institutional economic perspective, the answers for these questions don't lie in the importance or diversity of institution, but in the reflection on which institution really matters? Further, we need to ask what kind of institution is suitable for different countries at different development periods.To solve these practical and theoretical problems, we must keep more calm and sober to the future development. In fact, the problem that we face is still severe:our economic reform is entering a critical period, the extensive development mode needs charging and political reform has to start soon and therefore we still have a long way to go. Facing with the international and domestic challenges in the next30years, we must find the answers of how to give effect to institution construction to ensure the sustainable development in the future, which lead to the entry into modernized country.My dissertation is theoretically based on the new institutional theories, including institutional change, transplant, and alienation, and economical theories including institutional embedding, fusion and conflict between formal and informal institutions, and analyzes the gains and loss of the transition occurred in Southeast Asia, Russia, Latin America, India, etc. With emphasis on China, the paper reviewed the transition of the economic institution in the past30years and its performance, analyzed the conflict, incompatibility and the efficiency loss occurring in the institutional alienation, and discusses the institutional arrangement in the future and the institutional logic to deepen the reform,. My dissertation concludes five Chapters.Chapter I:The institutional change, transplanting, embedding and alienation. The important contribution of the school of new institutional economics is to emphasize the importance of institutional change on economic development. Institutional change happens naturally in a certain stage of economic development. However, it does not necessarily spur economic growth. Due to a series of factors, the economic consequences brought by may be different even under the same arrangement of institutional change. Drawing on the new institutional economics and economic sociology, this Chapter discusses the institutional transition, embedding, fusion and conflict among target institution and existing institution, traditions, culture, ideology in the process of intuitional changing and transplanting,Chapter II:International perspective on institutional changes and economic performance. This Chapter analyzes institutional changes in different countries and the achievements thereby. For instance, Indonesia and Philippines implemented the market-oriented economic system in accordance with the modes established by developed countries, leading to great fluctuations in economy. After the failure of "shock therapy", Russia re-adjusted reform ideas, strengthened state intervention, and finally embarked on the road of recovery and revitalization. The democracy in Latin American countries did not lead them onto the road of sustainable development but resulted in the serious crisis in1980s. While compared with China, the democracy in India resulted in lower economic growth, but they are catching up at a remarkable speed. Therefore, the key to successful transition is to create a suitable political environment to ensure effective implementation of institutional arrangement. Chapter III:Trajectory and performance of China's economic institutional changes. Essentially,30years of reform and opening-up is a continuous change of economic institution. This Chapter starts with the highly centralized planned economy before the reform and opening-up, then discusses the history of Chinese institutional transplanting and institutional reform and finally makes a survey on Chinese institutional environment and arrangement from the view of marketization, liberalization, governmental regulation, and degree of governmental intervention, such as the index of governmental investment and consumption. This Chapter also summarizes the economic performance induced by institutional transformation. The success of Chinese economic institutional reform and sustainable economic growth of more than30years, is gained by sticking to the correct direction of reform and selection of a suitable institutional change scheme. Through gradual reform, China has made three important changes, including resource allocation from planning to market, ownership from single public to variety, and macro-control from executive order to regulation.Chapter â…£:The mechanism of institutional alienation in Chinese economic transformation. The long-term small-scale peasant economy has ingrained impact on people's thinking and behavior method and formed a governance society where administrative power controls the society. Coupled with a micro-intervention planning system established after1949, the institutional change has been more complicated since1978, and typically manifested in the conflicts among formal institutions and between formal institutions and informal institutions, and institutional embedding and alienation has always played a role. Based on the path dependence and lock-in theory of new institutional economics, this Chapter analyzes the conflicts of planned economic institutions and market economic institutions in the reform process, the consequences of path dependence in the institutional embedding and alienation, incompatibility of informal institutions and market-oriented economic institutions, macro-efficiency loss caused by rent-seeking problems and, as well as inefficient institutions which might lead to non efficiency.Chapter V:The improvement and development of Chinese market-oriented economic institutions. The transplantation, alienation and grounding are embedded in its own political civilization and cultural tradition, but they cannot be limited to the specific political and cultural issues. The essence of continuous improvement of economic institutions is to make constant breakthrough on the political, legal, cultural and ideological constraints, and continue to get the cooperation and support of these formal and informal institutions. Aiming at the constraints to the establishment of market economic institutions analyzed in Chapter IV, this Chapter focuses on the following issues including formal institutional arrangements of political and legal systems, evolution and improvement of macro and micro economic institutions, the constraints and transformation of traditional and cultural informal institutions, ideological conflict and guidance. Finally, this Chapter discusses the logic of further reform and puts forward suggestions for improvement and development of Chinese market economy institutions.
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