Measurement Of Political Transaction Costs Based On MIMIC Model And Influence On Economic Growth

Since the Third Plenary Session of the Eleventh Central Committee, China began economic reform, taking economic construction as the center, from the current situation, the achievements of the reform of the economic system is remarkable. However, with the deepening of economic reform, the hidden social problems continue to emerge, including the reform of the political system lags behind economic reform, the issue gradually attract attention and become the focus of the current reform.The transaction cost theory is an important analysis tool in the new institutional economics, political transactions costs is an important part of the transaction cost, this theory can be used to analyze the need for political reform in China. On the basis of clarifying the current political model, relationship between central and local governments, interest groups, analysis the factors of impacting China’s political transaction cost since the reform and opening up, Using SEM ideology to build MIMIC model, this paper establish political transaction costs system for the first time. The result reveals that, political transaction costs can be divided into three stages in the period of institutional transformation, the level of economic development and the interest groups have positive effect on the political transaction costs, urbanization rate and development of information technology have negative effect. On this basis, using neo-classical theory to analyze the impact of political transaction costs on economic growth, the optimal size of China’s political transaction costs is9.64%of GNP, however, since1990China’s political transactions costs had already exceed this value, and showed a trend of slow growth, to scale political transaction costs have hindered the economic development, the reform of the political system is imperative.