The Theoretical And Empirical Research On Social Captial From The Perspective Of Rural Society

Transformation development is a main feature of development in China that will continue to exist in quite a long period. Under this background, how to understand the driving force and mechanism behind the development of China which experiences the transition from a traditional agricultural country to a modern one, and meanwhile from a planned economy to a market one, is of tremendous value both theoretically and empirically. The experience of rural society as a starting point of China’s reform is a mirror of China’s overall development. To understand and interpret the rural village is of importance for grasping inherent powers and essential characteristics of China’s development from1980s. This paper analyses the process of rural development based on social capital theory, and further advances existing concept and theory of social capital with corroborations gained from developing practice of rural society.The exploration and evolving practice of social capital theory has been followed by scholars since the concept of social capital was first proposed in the1980s. Although the study on social capital is a history of controversy, the fact that its concept and research methods have been involved in many areas of economic research cannot be ignored. In this paper, we define social networks and informal organization as main reflections of social capital thinking from the village level. Based on the theoretical literature achievements home and abroad under the given humanistic and historical conditions this paper shows that social capital dominates three mechanisms and effects under our specific stage of development, ie social transition, which first serves as an alternative mechanism of protection for property rights and market transactions, then a backup mechanism of chance access and signal release, and third a support mechanism of collective action and internal governance. Three mechanisms relate to three effects respectively, namely system effect, resource effect and organization effect. Theoretically, this paper fluoroscopies the " system effect" of social capital, from the perspective of reducing transaction costs, eliminating property uncertainty and realizing intratransaction, and the "resource effect" of it, from occupation choice, entrepreneurial resources acquisition and factor flow, and "organizational effect", from the perspective of public goods provision, collective action and cooperation. In a sense, it is exactly the three mechanisms and effects of social capital unravel the mystery of the realization of China’s rapid economic and social development when constraint system is lagging behind.Based on clarification of the three mechanisms and effects of the social capital, I theoretically interpreted and analyzed the rise and expansion of rural industry first in order to deepen the understanding of the process of industrialization and urbanization in China initiating from the rural industrialization. Secondly, through analysis of governance and village elections,I provided feasible propositions of good governance for rural area and the whole society, especially noticeable governance modes on village-level informal organization and institution embedded in formal organization governance. Finally, analysis and research on rural entrepreneurship, factor flow and market effect help improve China’s current employment policy, provide effective guidance for market-incentive mechanism of innovation and employment and guarantee measures.In addition, this paper also collected a dataset on traditional organization and social structure by investigating about200villages of central Zhejiang. Using the dataset and village-level agricultural data, this paper empirically analyzed village governance performance measured by per capita income and internal governance structure characterized by village directors’ social identity, Relationship between social capital and entrepreneurship villagers is also investigated in contribution to establishing intuitive understanding of the relationship between social capital and development. Admittedly, social capital is not the key to all mysteries of development when concerning its essential functions in development of economy and society. However, introduction of social capital provides us insights to understand the future economic and social development. Despite the fact that the market power has become dominant in resource allocation, traditional non-market power such as history, culture, morality, customs and other factors still influence and restrain behavior choice, and even affect the keen research topics covered by classical economic theories, which include institutional change and economic performance. Market economy is systematized, whose systematization demands come from not only the formal systems designed by government, but also the informal systems created outside of government. One of the main conclusions of this paper is that:only when the formal systems built by the government and the informal systems or institutions set up by community integrated and formed an united provider of system, can we ensure that balance of market-supply and market-demand system will be maintained properly, and then ensure the realization of the market economy’s steady and rapid development, which is based on the effective supply of system.