Why China's approach to institutional change has begun to succeed
- 作者：Shixiong Cao ; shixiongcao@126.com
- 关键词：Cost-effectiveness ; Demonstration approach ; Institutional change ; Social cost ; Transaction cost ; Testing of institutional economics
- 刊名：Economic Modelling
- 出版年：2012
- 期刊代码：7_02649993
- 类别：eco
- 出版时间：May, 2012
- 卷：29
- 期：3
- 页码：679-683
- 文件大小：245 K
摘要
In the constantly changing modern economic environment, a country's ability to implement institutional reforms is crucial to maintain economic growth and to promote the welfare of its citizens. Unfortunately, it can be difficult to persuade institutional stakeholders that the change is necessary, and as a result, efforts at institutional change often fail. To avoid situations in which change is sudden and disruptive, China has chosen a more cautious approach of gradual institutional change leading to smooth reform, which Deng Xiaoping referred to as 鈥渃rossing the river by stepping from stone to stone鈥?鈥?a metaphor that translates into doing a careful experiment before broad application of an approach for which you lack prior experience. This approach allows adaptation to local conditions during subsequent broader adoption of a new approach, and can thereby decrease the risks and costs of adopting a new strategy by first testing the change and then demonstrating the potential benefits to local residents and governments. This innovative approach has been a key component of China's economic reforms since 1978, and the Chinese experience shows how adapting programs to local natural and social conditions can help to motivate change and sustain the implementation of new institutions.