Needham Analysis

This paper gives an analysis of the traditional institutions before modern China.Based on North's theory of institutions and institutional change,this paper explains the "Joseph Needham's Mystery".North divides institutions into two parts involving formal institutions and informal institutions.Different from this,this paper divides institutions into three aspects including economic institutions,political institutions,and cultural institutions.In this paper,we try to present the reason why the industrial revolution did not occur in China who had comparable advantages in technology:it is the compound effects of cultural,political and economic institutions who failed to play their roles as "Catalytic Effects of Institutions",and the reciprocities of each aspect,because of which the institutions cannot change into an efficient structure which would be suitable for industrial revolution.After the boom in the history,China trapped in a kind of stagnancy situation.The China's reform has experienced more than 30 years.Many issues came into serious problems along with the continuing growth of China's economy.Learning from history,it is meaningful for us to reconsider the "Joseph Needham's Mystery",and try to push the change of our economic,political and cultural institutions to achieve the "institutional equilibrium" on a new level,which may give more incentive to economic future growth.