Urban Economic Study Based On Institutional Analysis

Through a historically empirical research on the significance of the urban economy, this paper attempts to further reveal the institutional essence of the city as a human economic and social order, as well as interpreting a new institutional concept on urban and an analytical framework. Besides, it puts forwards some policy recommendations on urban development, population and land, which provides a new perspective on the theory and practice of urban economics.This paper systematically analyzes the urban economics research ever existing, and draws on the analysis of institutional economics, economic geography and other disciplines. Economics of the modern city is really a cross-discipline. While in the era of new economic geography, subject analysis paradigm has made a critical breakthrough in becoming an integration of the mainstream economics. But it is still in lack of a unified definition on urban, as well as the general sense of urban sources abstracted. Confined to the dogma of the space and transportation costs, it got stuck in the description of the phenomenon of agglomeration economies. However, urban science or space science did not fully disclose the transactions start and secondary attributes on the social order of the urban, which leads to a lack of explanatory power to the real world.Urban is the human spatial order in presence of trading centralized. While transaction origin of urban has been consensus for a long time, it is an innovative perspective to extend the concept of transaction and abstract it into the unity of urban origin. This paper argues that the Transaction not only engender the order for the Market in the history of mankind. As a matter of fact, the agglomeration of transaction produces another order - spatial order. Therefore, this order or the institution is so-called Urban. Based on this historical and theoretical logic, this article gives the definition of Urban:Urban is a spontaneous spatial order linked by various transaction rules, beliefs, approaches and transaction participants. It is an institution of human space fabric on the basis of saving transaction costs and achieve agglomeration economies. Furthermore, it is also an institution combinations protecting and forming the transactions aggregated. This definition of urban is not only institutionalism. but also an abstraction and generalization of urban phenomenon, which involves a general sense beyond the disciplinary barriers,This paper insights a more innovative view that the city is a collection of institutions. It analyses a framework of urban institution on the basis of the transaction, which includes the transaction of urban, transaction participants, transaction costs, transaction system, etc. What's more, it puts light on the formation of the urban, the scale changes and space expand through the institution concept of the urban. By using the transaction and institution analysis tools, it explains what the institution collection the urban is. And it answers the question that what kinds of institution constraint, institution changes or institution innovations incite the evolutions, changes and development of the economy of the urban and the society. This is a new research approach to urban economics.This paper extends to consider the significant impact on the agglomeration of industries, changes in urban space, urban economic growth generated by population and land. It explains, classifies, and summarizes the transaction costs incurred by the process of population migration and land transaction. Through some instances, it also confirms the importance and necessity that population, innovation of land institution reduces the transaction cost of urban, optimize the allocation of resources and the urban development. Some of these conclusions serve as guidance to the reality.The article first examines the relationship between the spatial heterogeneity of the transaction costs and the size and the level system of the urban. It demonstrates that the space heterogeneity of transaction costs is formed from three manners: changes of the equilibrium of institution structure, changes of the production mode, and the enhanced effect of the resource endowment. It introduces two variables to explain the intrinsic relationship between the spatial heterogeneity and the formation of urban groups, which are transaction costs and industrial relevance. Furthermore, it attempts to resolve the formation and evolution of urban groups via an empirical research on the urban agglomeration, which takes the Yangtze River Delta as an example. The article also poses a policy recommendation that we should take urbanization as a strategy of economic and spatial organization transition. Through reducing the cost of space organization, we can find the resources for sustainable development in future China; it is proposed to make more innovations and improvement to the institutions, which would be the focal point and solid foundation of urban development next round; We should also seize the opportunity to promote the reform of population and land, eliminating the institutional barriers to urbanization:the essence of urban competition is institution competition, etc. These are some important views based on the logic of institution analysis of the urban.The research method is also novel. Based on the tradition of Ricardo and Marx, this article employs an interpretation of empirical analysis. Firstly it abstracts the origin of the urban into transaction. Starting from this abstracted concept, it constructs the concept of urban institution and institutional framework comprehensively, as well as establishing a logical relationship among the transaction-agglomerations-the institution-urban-urban system. In particular, through the analysis of urban evolution, it reveals the transaction agglomerations-the revolution of institutions of human spatial order-the historic dividing line between urban and rural areas and the institution evolution, therefore, the results proposed from this research have a strong theoretical and practical innovative.