Research On Inhibitory Effect Of Community Economic System On Opportunism

Economics originator Adam Smith pointed out in "The Wealth of Nations": in avariety of trading relations, the main factors which hinder the success of the transactioninclude opportunism. Therefore, in order to contribute to the success of the transactionso that to promote long-term economic development, the developing countries have toface the problem of inhibition of opportunism. However, because of their historicallegacy, the developing countries level of development of the market economy, thedegree of perfection of government agencies as well as the maturity of the legal systemare relatively low, and the upgrading of these aspects couldn’t be accomplished in anaction, which led to powerlessness to suppress opportunism for developing countries.Therefore, in order to suppress opportunism, on the one hand developing countries needto constantly improve the level of development of the market economy in the region, thedegree of perfection of government agencies as well as the maturity of the legal system;on the other hand, they need to find new ways to inhibit the opportunist.Through the study of literature by Williamson, Snow, and Hayami woo Jiro in thefield of institutional economics and development economics, I found that thecommunity economic system plays a prominent role in inhibiting opportunism.Community economic system establishes on a contact group of close mutual trustindividuals and they have common cultural habits, cognitive inertia, as well aslong-term formation of customary norms, which are able to provide inherent constraintsfor community economic system. On the other hand, because the interaction ofhigh-strength density can reduce the loss of information in the dissemination process, itincreases the community economic system’s external sanctions efficiency.Meanwhile I find out, these years social capital is becoming a hot concept andanalysis paradigm. Experts and scholars of sociology, economics, political science,management science, and even the history have used the concept of social capital toexplain the socio-political and economic phenomenon. I think in the researchcommunity economic system to inhibit the opportunist, we can base on the point ofview of social capital. This can be more thoroughly when profiling the role ofcommunity economic system in inhibiting opportunism.Based on the research ideas and research purposes, I first used the literatureanalysis to make a comprehensive exposition on the literature of community economicsystem, opportunism and social capital. I differentiated the operating mechanism of community economic system into the inherent constraint mechanism and externalsanctions mechanism, and divided the social capital into cognitive social capital andstructural social capital. Then, I used the logical deduction which was based on theperspective of cognitive social capital and structural social capital to make a depthanalysis of the inherent constraints of community economic system of opportunism. Atthe same time, I used the theory of information economics to analyze communityeconomic system’s external sanctions to opportunism. Then, by using the logicaldeduction on the basis of game theory, I constructed two theoretical models to validatethat the Community economic system makes a significant role in the suppression ofopportunism. Meanwhile, by using the case analysis method, I took the Grameen Bank’ssuccess stories as an example to illustrate the feasibility of the community economicsystem inhibiting opportunism.In the end, based on a series of analysis, I got two conclusions: one is the normaloperation of the community economic system is based on social capital supports. Theother is the community economic system can weaken the opportunism’s behavior ofspace through internal restriction mechanism and external sanctions mechanism. Sobased on those conclusions, I made some policy recommendations for China ininhibiting opportunism: on one hand, China should make efforts to build a marketeconomy system and perfect the legal system, on the other hand, China should strive tofoster social capital and support community economic system so as to make up itscurrent blank in inhibiting opportunism, rather than overlook the role of the communityeconomic system in inhibiting opportunism,...