Theoretical Explorations On Adaptive Efficiency

Since institution and its function have been focused by many economists, there were many literatures on the institutional efficiency or the performance of institutional changes, the studies of large-scale institutional changes of China and Russia are also included. China and Russia are taking a different path of reform, and had different performance of reform, the system they use also have different efficiency, so how to evaluate the institutional efficiency in the long-term institutional changes is of greatest importance, it can make us fully comprehend the process of institutional changes, or in other words, let us sense the general rules of institutional change so as to achieve the success.Since North have founded the"adaptive efficiency"theory, the researchers focused on the understanding of the concept of adaptive efficiency and relevant elements. But in the institutional change theory, there is still exists cognitive and research shortages of the importance of adaptive efficiency which is the traits of institution structure, this structure can bring the long-term economic growth. Though North's research only focused on these two aspects, the results of his research step into a solid foundation for the further studies, and encourage us to take more in-depth consideration on the extended level of adaptive efficiency theory. The research on the concept and the theory development of adaptive efficiency formed the main content. Although some scholars have explained the concept of the adaptive efficiency, there are still exists some doubts; shows the dynamic adaptive adjustment in the internal institution structure, define and describe the adaptive level of the structure so as to concrete the adaptive efficiency theory and find the direction of the reform. That is the target of this paper.Through comment the literature of domestic and foreign country, analysis the evaluation criteria of institutional efficiency, we affirm that adaptive efficiency is the evaluation criteria of the long-term institutional change. The basic character is that the thesis consists in the limited rationality hypothesis, and regards North's theory as the main analytical instrument. From the adaptive angle, we research the adaptive indicator and its level, also including the two policies of reform. Finally, we give some suggestions on how to achieve the adaptive efficiency.The research obtains the following conclusions:First, domestic scholars thought that"adaptive efficiency"theory of North can be revised: a society, takes on a long term growth trend, because its system structure promotes the knowledge to be full, correct, coordinate used and updated, by conducting the individual mode of action, dealing with the uncertainty. But this paper points out that it is not exist in a necessary link between individual actions and the whole institutional changes, that is to say, there is a link between micro and macro which called"the key participants". By introducing and classifying this factor, the concept of adaptive efficiency can be finally revised: one country's economy can have a long term growth trend, because the institution structure can make certain adjustments so as to response to the requirement of the key participants, which is formed in the process of the individual knowledge's renew, coordinate used and development.Then, this paper discusses the internal structure of the institution, including proto-institutions and its derived institutions, institutional chains and institutional function modules, system core and the system attributes. Though there are some scholars have already analyzed the adjustment of the institution structure, but their analysis is not comprehensive. We made a relative comprehensive research on the dynamic adaptive adjustment of the institution structure, including the adjustment of the institutional chain, different chains and proto-institutions. And also list many indicators from the angle of economic, political and social. More important, we describe the adaptive level and its function with graph and formula. Based on these analyses, adaptive level will be divided into five grades: adapt completely, a better fit, may meet, cannot adapt, not be able to adapt.Finally, we comment the two type of reform strategy called gradual reform with flat style and radical reform with mutation style from the angle of adaptive, we obtain the following result: adaptive efficiency is the general rule of the institution change, no matter what strategy you take; the ultimate goal is made the institution structure keep higher adaptive. In the final article, we describe the traits of the structure which have the adaptive efficiency, and give some suggestions on how to get the adaptive efficiency.