Study On The Power Influencing The Institutional Change

The new Institutional Economics of Institutional Change theory is built on property rights theory and transaction cost theory and we use efficiency standards and comparative static approach to analyze the institutional change. In views of the new institutional economics, the reason that an institution arrangement substitutes another one is the lower transaction costs, and in a competitive environment, this new institution arrangement will be selected, which is said from the point of efficiency. But in reality the institution arrangement with lower transaction costs may not replace that with higher transaction costs. The purpose of this article is to explain the why the institution with higher efficiency can't substitute that with lower efficiency, which can make the analysis of institutional change more real.This paper explains the real phenomena that the more efficient institutions can't substitute the less efficient institutions from the perspective of power, and analyze the mechanism that power influences the institutional change. Often the most efficient institutional change can't be achieved with the influence of power. This paper finds two possible ways of institutional change, and either has its own characters. After that this paper analyzes how the efficient institutional change can be achieved, which can guide the real institutional change.Firstly this paper analyzes the power in the real world and confines the analysis in three institutional arrangements of market, enterprises and the state. In each part of the analysis we will firstly give an efficiency standard, and then it will explain how the power make the reality deviate from the optimal efficiency by analysis. After that we analyses the mechanism of power influencing the institutional change to explain the phenomena in reality. Based on the mechanism analysis, this paper analyzes how to make efficient institutional change achieved with the constraints of power, which can guide the real institutional change. Finally the evolutionary characters of the power influencing the institutional change are described.This paper mainly uses game theory methods and the combining methods of normative analysis and empirical analysis. We formulate a model of game theory to reflect the influences of the power owners to the institutional change based on the strategic choices for self-interests. The combining methods of normative analysis and empirical analysis are to combine the efficiency standard and what in real world to do the contrast analysis.The innovation of this paper lies in analyzing the institutional change from the perspective of the power, which reveals a more realistic process of institutional change. It not only can explain the phenomena that the efficient institutional change can't be achieved in reality, but also can give some inspirations on how the efficient institutional change can be achieved, which attaches more realistic senses to the analysis of institutional change. And this paper put up an idea that the study of the power influencing the institutional change can be combined with the analysis of evolution.The disadvantage of this paper lies in that the analysis of the power in real institutions is not deep enough. Otherwise the evolutionary characters of power are needed to be further studied.