A Research On The Development Of Informal Finance In The Western Areas Of China: Pattern Choice, Institution Design And Policy Suggestion

Finance is the core of modern economy. The relationship between development of financial system and growth of economy has been paid great attention to. In many developing countries, that informal finance coexists with formal finance is the reflection of the obvious dualistic economic structure. How does the financial system promote economic growth?Although informal finance exists in many countries, especially in developing countries, according to Mckinnon & Shaw's research, informal finance is the financing mechanism with a low efficiency, which is not important no matter in developed and developing countries. Therefore, research on informal finance has not been paid enough attention to.However, with the development of informal finance in the world such as the expanding scale of informal finance, the role of informal finance in regional economy has been emerging, and governments in many countries has been paying attention to their own informal finance. Economists have also turned their research to informal finance with the help of various economic theories. Some international economic organizations even carried out multinational research on informal finance after recognizing the development in the world.Informal finance has a labyrinthine development in China, but it has developed rapidly. China has reconsidered the status of informal finance in China's financial system with informal finance's supporting the economic development especially supporting the small-scale enterprises and rural economic development. Many scholars have begun to study informal finance which leads to a new stage for research on informal finance. Establishment of informal finance and it's mechanism has been considered to put into the China's financial reform. But according to China's actuality, informal finance has no a legal status, and supervising informal finance has also met with many difficulties. Therefore, how to prescribe and develop informal finance to promote the growth of national economy has become the emphasis of the dissertation.The dissertation analyzes the roots and rules of informal finance's origin and development with use of theories on financial medium, game, information economics, contract, institution economics and economic growth, and with the means of combining theory and practice, macro and micro analysis, and contrast and comparison. On the basis of analyzing the development of informal finance home and abroad, the dissertation points out the status quo of informal finance in the western areas in China, analyzes the effects of informal finance, points out the existing problems of informal finance, which hope to promote the healthy development of informal finance in the western areas of China, henceforth promote a rapid development of western areas of China, and finally realize the strategy of great development of western areas of China.The conclusion of the dissertation is as follows: the first, in China, informal finance and financial duality has come into being from the economic system; the second, informal finance has improved individual's welfare and has different exchange character and contract system; the third, financial development and economic growth have effects on each other, and informal finance provides supports to regional economic growth; the forth, as a institution arrangement, informal finance has promoted the innovation of a country's system; the fifth, it is urgent for the government to constitute laws to recognize and supervise informal finance; and the last but not the least, various measures should be taken to promote the role of informal finance's support to the development of the western areas of China.The dissertation includes seven chapters.Chapter one is the introduction, which introduces background and significance of the dissertation, research on the issue of scholars in the world, and the means and frame of the dissertation.Chapter two defines informal finance, dualistic structure and theory tools. On the basis of defining the connotation and extension of the important concepts, the chapter systematically expatiates the theories on informal finance which explains the mechanism of existence, development, performance, bond and price fixing of informal finance.Chapter three introduces the development and present situation of informal finance in some countries in the world and some areas in China in order to learn from the experience and lessons which will benefit the development of informal finance in the western areas of China.Chapter four discusses the present situation of informal finance in the western areas of China. By analyzing the present situation of economy and finance in the western areas of China, considering the present situation of informal finance in the western areas of China, the chapter explores the effects on promoting economic development in the western areas of China of informal finance, and by turn, produces the content of the next chapter.Chapter five designs the pattern which is chosen to develop informal finance in the western areas of China at present.Chapter six puts forward the institution arrangement about informal finance in the western areas of China on the above analysis. The chapter discusses institution design to promote the development of informal finance in the western areas of China on the basis of above analysis so as to boost the economic development of the western areas of China.The last chapter is the conclusion, which makes a conclusion for the dissertation and points out the shortcoming of the dissertation and direction of future research.