The Study Of The Effect Of Property Rights Protection Institutions On Economic Growth

The classical economic growth theory holds that material capital,human capital and technological progress are the decisive factors of economic growth,but it ignoranced the important role of the institutions.The new institutional economics emphasizes the decisive effect of the institutions on economic growth,which makes the focus of the economic growth theory turn to the institutions itself.Therefore,it becomes an important topic to study the difference of economic growth in different regions of our country based on the institutional views.First,based on North’s classification on economic institutions,the article begin from the point of view of state plunder and private plunder and build an index system to measure the different regional institutions in China.Because the institutional quality and economic growth is not a simple one-way causal relationship,in order to accurately measure the specific effects of the institutions on economic growth,this paper constructs the instrumental variables of the property rights institutions and the contract institutions and uses the two-stage least squares method(2SLS)to analyze the economic effect of the institutions.In the univariate analysis and bivariate analysis,the growth effect of the property rights institutions is very significant,and the contract constitutions have no obvious effect on the economic growth.Finally,the control variables are added into the model:material capital,technological progress and human capital factors.It was found that the effect of the property rights institutions was stable and that economic growth was promoted by stimulating investment;contract institutions does not directly promote economic growth,at the same time,the interactive effect of the contract system and the physical capital is not significant.So the contract institutions are not the decisive element of economic growth.This paper verifies the relative role of property rights institutions and contract institutions,and explains the reason of the differences of different areas in China on economic growth from the institutional point of view.It can be enlightening to narrow the regional gap and carry out property rights institutional reform.