Research On The Institutions For Narrowing Urban-Rural Income GAP In China

The Expanding of urban-rural income gap has become a hot and difficult problem in the process of China’s economic development and social progress. So it has caused public concern, and there are so many researchers to research on the urban-rural income gap, but everyone thinks in his way. Based on the forefathers’ idea, this paper uses the system method to explore the institutional law which may has impact on urban-rural income gap, and then give out the reform ideas for narrowing urban-rural income gap.This paper takes the discussion and analysis of the institutional system and its characteristics as a focal point, and thinks that institution set which is made up of complex connection institution arrangement fit the definition and characteristics of the system, so that it can be a system. This provides theoretical support for using system theory method to construct the system analysis system to study institution.The institutional system analysis method which is constructed in the paper mainly involves three aspects:(1) constructing an institutional system evolution model based on logistics model, it can reflect the cross influence between fairness and efficiency, and also can determine institutional system equilibrium point and stability;(2) gray relational entropy which can reflected institutional system status and urban-rural income gap with limited relevant data, according to the entropy change size and positive and negative to judge the evolution direction of institutional system and internal stability degree;(3) the cusp catastrophe model of institutional system which can judge the critical point of system mutation, and to determine whether the institutional system can the existence of mutation may through the stability analysis of the critical point.Combining history and logic was one of the methods in this paper. There are two aspects to analysizing history, status quo, characteristics of the expanding of urban-rural income gap in China.(1)The author want to realize and combing the institutional change of the urban-rural income gap in China since the founding of the country. This paper finds that there was a big reform almost every time when urban-rural income gap changed.(2) The author combine urban-rural income gap with Chinese transition period. Through comparative analysis of performance about American, Japan in the change of the urban-rural income gap in their transition periods, this paper analysized characteristics of the urban-rural income gap in the transition period of China. Chinese transition period was mainly due to the reform and transitions of institutional reform policy, the fluctuation the urban-rural income gap are closely related to the reform policy.The part of institution reasons based on thought of institutional evolution, teases apart the institution causes which influence the urban-rural income gap, and uses the related data to verify it and mainly obtains two conclusions:one is the urban-rural income gap is the evolution results of the combined effect of multiple factors in institutional system; the other is the fundamental reason behind the cause of expand the urban-rural income gap is the institutional system.Then empirical analysis is done to the institutional system from three aspects of the system of three systems analysis methods. Firstly, the institutional system between1983and2009is divided into two periods from1997according to the changing characteristics of urban-rural income gap. With the urban-rural income gap as fair variables and GDP per capita as efficiency variables, system evolution model is applied to analyze and compare system in two periods. The Cross impact among stable equilibrium of institutional system in two periods, urban-rural income gap and GDP per capita are quite different. Urban-rural disposable income and rural residents’ income sources constitute in six provinces are analyzed by the analysis method of grey correlation entropy and the cusp catastrophic model. The two aspects reflect that institutional system is far away from equilibrium and exists mutations.According to the analysis in the paper, reform of accelerating narrowing urban-rural income gap in China is put forward.The main innovations of this paper include three:1. The construction of institutional system analysis methodThe institution is a system of rules. Commons proposed that institution is holistic in his book, which is summarized from the perspective of institutional system. Li Zhiqiang proposed system science applied to researching institution and construction of institutional system theory; no one can construct an analytical framework of system method that institutional analysis can be applied to. This paper is based on institutional system to build a institutional system analysis framework. Construction of this framework is based on the system theory and combined with related institution theories and opinions. The core idea of the system theory is the concept of the whole, any system is an organic whole, it is not a mechanical combination or the simple sum of all parts, which also coincides with the characteristics of the system. The intersection of two areas exists.Another feature of the systems analysis framework in this paper is that its application can be applied in the real world, well explained the reality and supported by the establishment which is an important symbol of a theory. And this paper applies this analytical framework in the institutional analysis of urban-rural income gap. This application is an innovation, and it will test on the Institutional framework for system analysis method. This will be the most important innovations and the biggest feature of this paper.2. Analysis on the problem of urban-rural income gap by institutional framework for system analysis methodDouglass North analyzed the institution changing based on the efficiency goals of institution, and institution efficiency standards which he used to measure is economic performance. He believed that the institution can reduce transaction costs to improve economic performance. But institutional analysis of urban-rural income gap is not just efficiency, but also fairness; even fairness should be basic. So when we analyze the institution, it is fundamental different from North’s criteria. Comprehensive coordination of fairness and efficiency is also the key consideration in this paper when using institutional system framework for system analysis method to analyze the institution.3. Proposing reform ideas of narrowing urban-rural income gap based on the analysis presented in this paperReform ideas are not a bright spot, but it can be precisely highlighted its position by the institutional system analysis method. Reform ideas after analyzing the systems analysis framework is the most important innovation and also will be important features in this paper, and prove that our method is based on the reality analyse, and not fantastic.