The Integration Of Formal And Informal Institutions In The Development Of Private Economy

After 30 years'development , our country's private economy has become an important element of the socialist market economy. However, the institutional environment for the private economy still hasn't made a substantial change. There are still many restrictions that keep it from getting bigger and stronger. The most important but easily being ignored factor is the confliction between formal institutions and informal ones. The opinion of this paper is that the confliction and integration of the formal and informal institutions have an important bearing on the efficiency of institutions and the development of the private economy. Only if they are integrated, the institutions will make proper effects, and the private economy develops. Therefore, it's meaningful to study the phenomenon of the conflictions and to research how to decrease the conflictions and promote the integration.Based on the literatures on the development of the private economy and the formal and informal institutions, applied the normative and empirical analysis, from the aspect of institutional confliction and integration, this paper analyzes the traits of the confliction, expounds the foundations and conditions of the integration, and proposes the ways to promote the integration. This article believes that the confliction between formal and informal institutions in the development of private economy shows mainly in three aspects. First, because of ideological factors and the long-time planned economy, most of the institutions are prone to the state-owned economy, such as the property rights system, financing system and market access system. Secondly, the negative factors in the traditional culture are not compatible with the market economy, such as the traditional family culture, the officialdom ideas and the egalitarianism, etc. Besides, this paper analyzes the institutional conflictions in different regions.Conflictions do exist, however, we should see that, after 30 years'reform and open-up, various formal institutions are being refined, the effects of the market economy increase gradually, and the concept of developing private economy is wildly believed among the people, and all these factors constitute a good foundation and conditions for the integration of formal and informal institutions. We should take advantage of this opportunity to accelerate the development of private economy. First, provide an institution guarantee by refining the formal institutions. Secondly, accelerate the reform of the informal institutions by pushing the ideology change,reinforcing the culture basis of the market economy , establishing concepts and conventions that match the market economy, and forming the ethics and values of the market economy. Thirdly, reform the informal institutions with the formal institutions, to enhance the turnover of the useful informal institutions to the formal institutions. Besides, the entrepreneurs should also do something in the integration of the formal and informal institutions.The unique feature of this paper is the new aspect, which is to study the development of private economy from the aspect of institutional confliction and integration. This paper also structured an analytical framework of the confliction and integration between formal and informal institutions preliminarily.