"Triple Helix" Model Of Institutional Change And Its Application

Since the Third Plenum of the Eleventh CCP Congress, China's reform and opening up has been carried out for nearly 31 years. Over the 30 plus years, China has not only made great achievements in economic and social development, but also piled up a lot of problems that cannot be ignored. Obviously, these achievements and problems should not be viewed simply from the perspective of macro economy. A reasonable answer must be sought from the perspectives of institutional arrangements and changes. For the direction and trend of the ensuing reform, institution and interest groups behind instruction should be focused to conduct thorough analysis and propose countermeasures. Based on the above considerations, the paper employs the Marxist institutionalism's analytical method and institutional change theory of the new institutional economics to build the "Triple Helix" model of institutional change so as to explain the achievements and problems in China's transition.In the "Triple Helix" model of institutional change, institution, growth and distribution are put in the same framework for analysis. Based on the understanding of the interactions of these three elements, the process of institutional change is further decomposed and divided to describe in details the determining mechanism of institutional change path in dynamic status. Comprehensively, institutional change doesn't always follow the principle of "Pareto improvement". On the contrary, in some sense, the interactions of institutional change, interest adjustment and economic growth would bring the ensuing institutional change to a vicious circle that "the strong stay strong and the weak stay weak". Interest groups benefiting from the first round of institutional changes would promote the institution in the direction beneficial to their own development while those damaged and weakened in the first round of institutional changes would remain in the position of being exploited in the ensuing reform. Only with strong regulation of the government can this cycle be broken. This model not only explains the features of China's economic growth during the transition period, but also points out institution as the root cause of improper distribution of interests in the transition period. It strongly explains the practices in China's transition. With the model as a tool, the paper also analyzes the institutional logical and interest relationship of China's state-owned assets reform and real estate market development and reveals the key point of the ensuing reform.Meanwhile, the paper also emphasizes the critical role of government in the transition. Government is not only an interest group of the institutional change but also the fundamental force to regulate it. Only by well positioning the government, accelerating government transition and continuously improving the government's capability can the reform be further advanced.