Institutional Change And Economic Growth

Since the institutional economic has been generated, institution is more and more concerned about the role in economic growth.The example of the emerging market economies is the empirical testing of the institutional economic theory. In order to quantify the contributions of institution to economic growth, the institutional school since Coase continuously make the institutional factor into the economic growth model so that people can more deeply feel the enormous role of institution to economic growth.From the late 1970s, the reform and opening up of China began about 30 years, the economic growth rate of GDP leaps about an annual average of nearly 10 percent.In addition to capital, labor, and other input to the contribution to economic growth, the role of institutional change can not ignored. Reform is a typical process of institutional change, and it is a process from the centralized planned economy to the open and decentralized market economy. Both micro-enterprise's and individual awareness and behavior change, and macro-administrative, financial and economic institution change. These changes not only changed the institution of resource allocation, increase the allocation efficiency, but also changed the way of economic growth.This article first combes the literatures of institutional change and economic growth, and inspects the different models of institution as the economic variables into the function of economic growth ,and finally there is an empirical testing of economic data using the institution index into economic growth model about Kaifeng located in the central region, the relatively backward economic development , to demonstrate the general role of institutional change to economic growth. The empirical testing of the institutional change contributing to economic growth to using a simple economic model and Kaifeng data about 30 years ,it is a major innovation for this study. The article is divided 4 parts.The first part is the introduction. From the typical process of institutional change of China's reform and opening up , institutional change and economic growth relations are issued, that is, institutional change is an important reason to economic growth. It is introduced about the theory of the institutional change to promote economic growth. At the same time the main content of this article, innovation and limitations are cleared .The second part is to describ the role of the institutional change to Kaifeng economic development .The third part is using the institutional index on the model of economic growth in Kaifeng's economic data to test the role of the institution to promote economic growth .The fourth part is the conclusions and outlook. Despite the economic growth is decided by many factors, the institution will undoubtedly play a crucial role. Whether it is the economy developed regions or backward areas, the institutional change is effective in promoting economic growth .