The Pattern Of Institutional Change And Its Influence On Efficiency: A Perspective Of The Power Structure

Many economists have studied the theory of institutional change: the evolutional economists defined their research only in the field of convention; the new-institutional economists neglect the function of power structure and the Theory of Public Choice take the other side. They had a common problem in which they did not explain the whole course of institutional change detailed at all. This thesis combines all these theory and investgate the institutional change generally, then ,the author expands his model of institutional change creatively.Why and how could the economists analyze the institutional change? Because the institution is paucity and the actor is rational. So, there are two reasons why the institution will change : there is exterior benefits of the institution or somebody want to recast the old benefit structure, though there are not the sufficient condition of institutional change. It concludes that the following factors determine the institutional change: the group who have the maximal demand for new institution, the power structure of external circumstance and the cost and income of the institutional change. The external circumstance has three types, the non-power center condition , one-power center condition and multi-power center condition.Under the non-power center condition, every actor has the equal status as one another ,so, the institutional change will take place under the condition that every one think the new institution will bring him more benefits than former ones and agreed with the new contract. The institutional change in this model will be efficient, but its decision to approach the new contract is inefficiency.Under the one-power center condition, any new institution can not be established if the power center did not consent it. So, the new institution benefits more to the center instead of anybody else. The institutional change of this model has an effective decision procedure but the new institution sometimes can not be carried out perfectly sometimes.In the multi-power center condition, each power center negotiate, quarrel, even fights with each other for the winner can control the new institution which will bring him the maximum of advantage. Because non of the power center has absolute superiority, the cost for new treaty is bigger than the model of no-power center condition and smaller than the model of one-power center condition. The institutionalchange happen in the multi-power center condition presents more good features such as stability and self-improvement.