International Comparative Study On The Institutional Factor Of Economic Growth

The theory of the economic growth in the past regarded system as the external variable, which supposed the external system being invariable while analyzing the economic behavior. Actually the economic behavior receives a lot of restraint, including the restraint on ideology of mankind itself as well as restraint the external various system arrangements bring too. The system is divided for two kinds, informal institution and formal institution.If overlapping the map of world's value to economic development, we can find countries of different economic development level are different from their value system correspondingly. Through the study on economic growth in terms of culture, religion, etc., the difference of the culture between the east and the west has influenced each way of development. The informal institution make a great impact on economy in both micro and macro level. Different informal institution makes different impact on deposits rate, capital accumulation of human resources, productivity and specialization, which help countries differ in capital accumulation and comparative advantage. Moreover, informal institution also has different effects on the guidance of government's macroeconomic policy, which help countries differ in the efficiency of resource allocation and utilization.It goes without saying that the formal institution has impact on the economic growth, but it is not consistent with the best institution. China, Singapore and India do not belong to the complete democratic state. Though Singapore and India have form of democracy, Singapore demonstrates certain characteristic of authoritarian, and the democracy of India is generally queried. By comparing study, China and Singapore with the characteristics of authoritarian have better performance in terms of government efficiency. While it is hard for India, pursuing over-democratization, to issue the economic policies because of games between the interest groups. In addition to the basic form, democracy has to rely on the other external institutions to ensure the normal operation of its functions.Institution change means the development course from one institution to the more efficient one. The most classical case of institution change in the world is the representative transition course of China and Russia in the eighties of the 20th century. By comparing the GDP growth rate and inflation rate in their transition period, we can observe the connection between institution change and economic performance and probe into the reasons of the difference.By comparing the Chinese state-owned enterprise reform with the privatization of state-owned enterprises in Eastern Europe, and Latin American countries in transition on the content and effect of the reform of property rights, it is more important to establish the protection system of property rights than defining them. In which the government should play the guiding role correspondingly based on the past experience.It is necessary to analyze the nature of the government before defining its functions. The government is a unique and important interest entity in the institution change and is closely related to the starting and moving forward and even finishing of one state transition. People's aspirations of government functions should be dynamic in different stages of economic development. As the reform deepens, people are turning attention to the government's social functions.The formal institution can be changed by an external institution supply. If you want the institution a positive effect on economic growth to maximize the effect of the government, it will raise strong appeals to an effective supply of institution. We will discuss the issue of government functions transition from three aspects of the political institution, economic institution and security for those two systems, the supply of institutional arrangements (such as legal systems, etc.).