In the new institutional economics, we must distinguish what is the concept of institution. Otherwise, where is the novelty of the new system? Coase believes that the so-called system is the code of conduct and communication methods between people or organizations, such as traditions, customs, habits, hidden rules, interpersonal relationships, blood relations and so on. These are all included in the research scope of new institutional economics. If we don't follow this institutional concept, it is not new institutional economics. This is a judgment tool which is different from economists in other research systems and mixed with new institutional economics. Although some economists are also studying institutions, or using the tools of new institutional economics to study their own institutions, they do not follow Coase's institutional view, so they can't bring all the economics of studying institutions into the field of new institutional economics. At best, it is the proximity of the research object. The system in the new institutional economics is not a system hanging on the wall, nor is it a system printed in documents or books. It is a very realistic and practical system to guide people's behavior rules.
Pure new institutional economists have a special impulse to worship the system. They think that the system determines the historical process and "the system determines everything". For example, the width of train carriages and the length of rails depend on the width of two horses' hips, not other factors. Because the original train was pulled by horses, the width of the carriage imitated the design of the carriage. The width of the carriage depends on the hip width of the horse, and the hip width of the two horses also needs to be consistent with the width of the carriage. Otherwise, there will be improper problems, such as the narrow front and insufficient power of the carriage; If the carriage is too narrow, the utility of the carriage cannot be fully exerted. So the width of the carriage is the same as the hips of two horses, which determines the width of the train carriages and tracks today. For hundreds of years, although the width of train carriages and tracks has changed several times, each change is determined by the hip width of the original two horses. The system of determining the width of train carriages and tracks according to the width of horses' hips has continued to this day.
(B) transaction cost theory
Transaction cost is the most basic concept of new institutional economics. The idea of transaction cost was put forward by Coase in 1937' s paper "The Essence of Enterprise". Coase believes that transaction cost should include the cost of measuring, defining and maintaining property rights, the cost of finding transaction objects and transaction prices, the cost of bargaining and concluding contracts, and the cost of urging strict implementation of contract terms.
The proposal of transaction cost is of great significance to the new institutional economics. Because economics studies the allocation of scarce resources, transaction cost theory shows that transaction activities are scarce, and market uncertainty leads to transaction risks, so transactions also have prices, so there is the problem of how to allocate them. The problem of resource allocation is the problem of economic efficiency. Therefore, a certain system must improve economic efficiency, otherwise the old system will be replaced by the new system. In this way, institutional analysis is considered to be truly included in economic analysis.
(C) Theory of property rights
New institutional economists generally believe that property right is a kind of right, a kind of social relationship, a rule that regulates people's mutual behavior and a basic rule of society. Qin, a master of property rights economics, thinks: "Property rights are the right to choose and use an economic article that is enforced by a society." This reveals that the essence of property rights is social relations. Only in Robinson's world, property rights have no effect. Only in the interactive human society can people respect each other's property rights.
Property right is a bundle of rights and a pluralistic concept, including ownership, use right, income right and disposal right. When a transaction occurs in the market, two rights bundles are exchanged. The content of property right bundle in transaction affects the exchange value of goods, which is one of the basic viewpoints of new institutional economics.
Property right is essentially a set of incentive and restraint mechanisms. Influence and incentive behavior is a basic function of property rights. According to new institutional economics, property rights arrangement directly affects the efficiency of resource allocation, and the economic performance of a society ultimately depends on the incentives provided by property rights arrangement to individual behavior.
(D) Enterprise theory
Coase, with his first transaction cost analysis tool, made a pioneering explanation of the nature and boundary of enterprises and the fact that enterprises and markets coexist in the real economic world, and expanded the single production system of neoclassical economics-market mechanism into a dual production system including enterprises and markets. Coase's enterprise theory sublimated the understanding of capitalism and commodity economy, and continued the life of the capitalist system after the Keynesian revolution.
Coase believes that market mechanism is a means to allocate resources, and enterprises are also a means to allocate resources, and the two can replace each other. In Coase's view, the operation of the market mechanism has a cost. By forming an organization and letting an authority (entrepreneur) dominate resources, some market operating costs can be saved. The saving of transaction costs is the only driving force for the market mechanism to produce, exist and replace enterprises.
And where is the boundary between enterprises and markets? Coase believes that because enterprise management also has costs, the scale of enterprises cannot be expanded indefinitely, and its limit lies in the fact that the cost of organizing transactions is equal to the cost of trading through the market.
(E) the theory of institutional change
The theory of institutional change is an important content of new institutional economics. Its representative figure is Douglas North, an American historian of new economics. He emphasized that technological innovation has injected vitality into economic growth, but if people do not have the impulse of institutional innovation and institutional change, and consolidate the achievements of technological innovation through a series of systems (including property rights system and legal system, etc.). ), then the long-term economic growth and social development of human society is unimaginable. In a word, North believes that institutions play a decisive role in a country's economic growth and social development.
One of the reasons for institutional change is to save transaction costs relatively, that is, to reduce institutional costs and improve institutional benefits. Therefore, institutional change can be understood as the replacement process of one system with higher income to another system with lower income. Property right theory, state theory and ideology theory constitute the three cornerstones of institutional change theory. The theory of institutional change involves the cause or origin, motivation, process, form, transplantation and path dependence of institutional change. Lin Yifu, an economist in China, believes that institutional change can be divided into two types: mandatory change and induced change, which develops the theory of institutional change and provides an excellent theoretical tool for social transformation in contemporary China.
Coase's original contribution makes economics move from the neoclassical world with zero transaction cost to the real world with positive transaction cost, thus gaining a strong explanatory power to the real world. Coase predicted in 1962 that the highly planned system in the Soviet Union would lead to excessive waste of social resources, and the life span would inevitably not exceed 30 years. As a result, the Soviet Union disintegrated at 199 1, and Coase won the Nobel Prize in Economics that year. With the development and dissemination of Williamson and others, transaction cost theory has become a very expansive theoretical framework in new institutional economics. Introducing transaction costs into various economic analysis is an important contribution of new institutional economics to economic theory. By 2009, the positive transaction cost and its related assumptions have formed a new institutional environment, which may replace the neoclassical environment, which is affecting the thinking and beliefs of many economists.