A Study On The Evolution Of Jinsha Station's Taxi Waiting System In ChenDu

As a complex and systemic Institutional Change Project, it is inevitable that China's social transformation has a wide variety of problems. However, it comes to a natural defect in explaining these issues for the classical economic theory. So the author uses the basic tool of institutional economics and evolutionary economics to make further research. This paper presents a Jinsha station's taxi Waiting system in ChenDu, which describes its origin, evolution, operating performance, and social welfare, and therefore can be treated as a microcosmic transformation case of China's Social Transformation.This paper theoretically explains the dynamic mechanism and evolution model of the Jinsha station's taxi waiting system's evolution by giving a profound analysis of the Jinsha station's taxi waiting system'evolution characteristics. The paper introduces two paradigms in this research:Institutional Economics and Evolutionary Economics, pays special attentions on the roles of Human Relationship in Chinese culture and each party's pattern of behavior in the game. This research is based on the methods of Comparative Institutional Analysis, Field Research, Logical Reasoning, and Empirical Analysis.The paper is organized as follows. In section 1, The author will first present a literature review of theoretical tool relating to this paper; and then introduce Institutional Economics'and Evolutionary Economics'basic ideas such as the definition,origin and evolution of institution; at last make a brief analysis of this paper with these thoughts.In section 2, the author will introduce the background of the evolution, such as Jinsha station,Taxi industry of Chendu. This part mainly shows the basic features of "Relationship Culture" and Taxi Management Office, Jinsha station, drivers, taxi companies, passengers and other parties'patterns of behavior. The author holds that only in-depth understanding of the case background and behavior pattern of each party in the game can we better grasp the basic characteristics of the institutional evolution.In section 3, the process of the evolution of the Jinsha Station's Taxi Waiting System is characterized. It is the main part of this paper and concluded by the author through long-term inspections, extensive interviews, thorough investigations of the basic facts of evolution process. At first, the Establishment of the Jinsha Station's Taxi Waiting Initial System was the result of an accidental impact-----an administrative decision-making, which originated in the creation of a civilized city in ChenDu. Although the traditional Theory of the Institution Origin is powerful in explaining many things. However, it can't explain this case. Secondly, the paper points that this system had internal and external instability through logic reasoning and comparative institutional analysis. Thirdly, the paper shows that the Jinsha station withdrew its supervisors as a result of the dispute about "service fee", and in turn this resulted in a disorder condition. Faced with this terrible condition, a new waiting system was established quickly after drivers' collective learning. Worthily to notice, such a system is unregulated, and is a hidden rule for taxi industry in fact. Fourthly, the author further analyzes the economic incentives of the evolution of the system, and then makes an intensive study of the cost-benefit issues of some carrying behavior such as taxi fight seat,long-distance,Round-trip passenger and so on. At last, the author gives the behavior Changes of the office of the Jinsha station:at the beginning, they will try to keep order and collect fees; but as time goes on, they will just have a single goal that is to collect fees. And then, Jinsha station's taxi waiting system has totally evolved into a rent-seeking tool.In section 4, two extension of this paper is discussed. One is that market behavior is always looking for loopholes of market mechanism and seeking a monopoly position, just like the case of the Jinsha Station's Taxi Waiting System, which shows the trend of monopolization. And this requires government regulation; but the Government in the process of regulation often has multiple goals, and then this in return leads to the failure of the regulating. The other one concentrates on the problem of institution or policy design. Just as this paper presents, an occasionally designed institution--- the Jinsha Station's Taxi Waiting System---alienates to a rent-seeking tool quickly, under the condition of the unsound legal system,"relationship culture " and the absence of public participation and supervision.In section 5, conclusions and valuable experiences are touched upon. Further more, this paper presents several matters that needs to be paid special attentions when designing an institution.Due to handsome work, this paper presents a Jinsha station's Taxi Waiting System, and distinguishes itself from others as follows:(1) The Subject Selection and the Angle of Study. This paper describes a case around us, analyzes the evolution of the Institution from a microscopic perspective, and the case also reflects the evolution characteristics in our social background to a certain extent. (2) The Train of Thought and Research Methods. The author takes long-term follow-up observations, interviews, and comparative institutional analysis methods; grasps the basic facts and details of the Jinsha Institutional Evolution under the direct of economic theories; and uses the method of logical deduction, profoundly analyzing the characteristics of this institutional evolution.(3) Main viewpoints: First of all, a rent-seeking system is not necessarily set up in order to seek rent at the beginning, but is more likely to set up for the public interest. However, it gradually alienates to a rent-seeking one. Secondly, it's very hard to design a sound policy or institution under the unsound legal system and "relationship culture", because there are thousands of ways to distort an institution. Therefore, the institution designer is required to be more forward-looking, have clear institution goals, and need to establish good public participation mechanism,supervisory mechanism and correction mechanism to ensure the smooth running of an institution.