The Power Of The Institution

Since the global financial crisis in 2008,the worldwide economic downturn intertwined with political evolution,has led to a deep,structural and sustained institutional crisis of the capitalist system,intriguing thinkers of different countries to rethink the origin of development problems at the institutional level.Economist Daron Acemoglu is known to be an interdisciplinary scholar on both political and economic studies.He innovatively uses economic approaches to study political problems and to build a framework for understanding political issues.From the dimension of political development theory,the core of Daron Acemoglu's academic thought lies in the analysis of the "intitution" as the main line and attribution factor.He uses economic analysis,quantitative research,historical investigation and other methods,to analyze the important relationships between institutions and power,institutions and economic performance,institutions and the rise and fall of nations,and political institutions and economic institutions.The main contents,features and contributions of Acemoglu's political development theory are embodied in the following four aspects:First of all,he uses "institutions determining the resource allocation" as the logical starting point,applying the dynamic game equilibrium framework to construct the interactive causal relationship between the political institution and the economic institution.The institutions are determined by the interest groups through political forces that influence current and future resource allocations.The allocation of political power plays a decisive role in the evolution of economic institutions.The current elite groups dominate the current economic institutions and the next period of political institutions.Secondly,he constructs the dynamic mechanism of political system evolution,for the first time providing a dynamic framework and theoretical model for the creation and consolidation of democracy.He provides a research framework for four different political paths,including 1)from non-democracy to democracy,2)democracy been founded yet unable to consolidate,3)to maintain non-democracy or democratization been postponed,and 4)non-democracy yet to maintain social stability.His research provides the possibility of predicting the direction of political path.Thirdly,he focuses on the impact of economic structure on the creation and consolidation of democracy to obtain empirical predictions about democracy.He attributes the different political outcomes of different societies to the different basic economic structures of the society,and analyzes the influence of economic structure on the occurrence and survival of democracy from three aspects:1)the industrial economic structure(capital intensity),2)the distribution of property rights among the population(middle class,etc.),and 3)capital and trade flows in the world(economic globalization)Fourthly,he confirms the logical relationship between institutions and the rise and fall of nations,putting forward an important proposition that "the reversal of institution" drives "the reversal of fortune".He classifies institutions as good ones and bad ones,i.e.inclusive institutions are good whilst extractive institutions are bad.He recognizes and emphasizes that an inclusive political and economic system is vital to a nation's long-term prosperity.Although the extractive institution may also stimulate economic growth,the growth is not sustainable.The solution to avoid national economic and political failure is to transform the extractive institution into an inclusive one.Acemoglu's theories of political development,including the endogenous institutional evolution theory,the influence mechanism of power on institutional evolution,the relationship between political system and economic performance.argumentation,and ideological bias,have their obvious limitations,yet they also have unique theoretical value and inspiration given that he reveals,at the institutional level,the structural logic of political economy and the law of the rise and fall of nations.In the process of promoting the modernization of the national governance system and governance capability in China,we can learn from Acemoglu's political development theory,by promoting the construction of modern state system and system innovation,to construct new "inclusive" political and economic systems,to regulate the public power,to improve the market system,to release of the resource characteristics of the institution,to improve the vitality of the institution,to stimulate the vitality of the market and society,to promote the great rejuvenation of the nation and to maintain prosperity for a long time.